Colgate-Palmolive net dips 43% on higher ad expenses

PTI New Delhi | Updated on January 31, 2011

FMCG firm Colgate-Palmolive (India) has reported a 43.09 per cent decline in profit-after-tax for the third quarter ended December 31, 2010, to Rs 66.24 crore, mainly due to high spending on advertising activities.

It had posted a PAT of Rs 116.39 crore during the corresponding quarter of the previous fiscal, the company said in a filing to the Bombay Stock Exchange (BSE).

Revenues, however, were up by 12.86 per cent to Rs 576.64 crore during the third quarter compared with Rs 510.95 crore in the year-ago period.

“During the quarter, the company continued to invest in its brand and equity-building activities with advertising and sales promotion expenditure at Rs 120.59 crore against Rs 75.28 crore during the same period of the previous year.

“This additional investment, coupled with lower deduction under the Income-Tax Act on the profits of the Baddi manufacturing facility, has resulted in lower net profit-after-tax and earnings per share for the quarter,” the filing said.

The company registered 12 per cent growth in sales volume during the third quarter of FY’11, led by a 13 per cent jump in the toothpaste category. It also saw a volume growth of 24 per cent in the toothbrush segment.

“In an inflationary environment, every effort is being taken to achieve cost-effectiveness while ensuring that the company remains competitive in the market through judicious pricing actions,” the company Managing Director, Mr Mukul Deoras, said.

Reacting to the results, the company shares were trading down 2.25 per cent at Rs 824 apiece in the afternoon trade on the BSE.

Published on January 31, 2011

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