Hindustan Coca-Cola Beverages net profit surged in FY20

Meenakshi Verma Ambwani New Delhi | Updated on November 02, 2020

Divestment of bottling operations in the North India led to the rise in profits

Hindustan Coca-Cola Beverages Pvt Ltd (HCCB), the bottling arm of The Coca-Cola Company in India, witnessed a massive surge in net profit in the financial year ended March 31, 2020, owing to divestment of its bottling operations in North India to its franchise bottling partners.

The company reported a net profit of ₹ 974.52 crore in FY 2019-20 compared to ₹ 321.68 crore in FY 2018-19, according to financial data sourced from business intelligence platform Tofler.

In an emailed response to BusinessLine, Melvin Tan, Chief Financial Officer, HCCB, said that the company, “has earned ₹ 571.1 crore on account of profit on sale of north territory business as going concern and the same has been shown separately under exceptional item in financials.”

“Reported revenue from operations stood at ₹ 9,788.91 crore (in FY 2019-20), up 4 per cent compared to ₹9,427.45 crore in the previous year. Comparable revenue growth for the same period after adjusting for North is 7 per cent during the year,” Tan added.

Bottling units

This refranchising exercise, announced by the company in December, included sale of its three bottling plants at Dasna, Varanasi and Jammu to its existing franchise bottling partners. With this, the company exited bottling operations in North India and now operates 15 bottling plants in the country.

Earlier this month, the beverage major appointed Neeraj Garg as the new CEO of Hindustan Coca-Cola Beverages Ltd, effective January 1. Garg will be taking over his new position in a financial year, which has been challenging, for the beverage industry, due to the Covid-19 pandemic outbreak. The Covid-induced nationwide lockdown coincided with the peak summer season severely disrupting the out-of-home channel.

With the country having gradually opened up economic activities, beverage companies are now hoping for an uptick in consumption in the out-of-home channel while stepping up focus on in-home consumption.

“We are seeing recovery across our portfolio and channels. At-home consumption has obviously improved and with the gradual opening up eating and entertainment points, we are hoping to see a recovery in the away-from-home channel also,” HCCB added.

Published on November 02, 2020

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