Uflex Q1 net profit jumps over two-fold to ₹196.54 cr

Packaging materials and solution company Uflex Ltd on Tuesday reported over two-fold jump in its consolidated net profit at ₹196.54 crore for the first quarter ended June 2020, helped by volume growth.

The company had posted a net profit of ₹90.91 crore during April-June quarter a year ago.

Its total income rose marginally by 0.78 per cent to ₹1,997.54 crore during the quarter under review as against ₹1,981.97 crore in the corresponding period of previous fiscal.

Uflex’s total expenses declined 6.94 per cent to ₹1,734.87 crore in Q1 FY 2020-21 as against ₹1,864.29 crore a year ago.

“Due to the pandemic, consumption trends have witnessed a shift and flexible packaging has gained much more importance especially because of the hazards attached to non-packaged products. This resulted in higher production and sales volume,” Uflex said in a statement.

Total production volume during the quarter grew 13.44 per cent year-on-year (YoY) to 1,07,599 tonnes, while total sales volume increased 8.97 per cent YoY to 1,03,575 tonnes.

Revenue from flexible packaging activities rose 0.62 per cent to ₹1,933.98 crore as against ₹1,921.94 crore in April-June quarter a year ago.

Revenue from engineering activities grew 22.84 per cent to ₹80.38 crore from ₹65.43 crore a year ago.

Commenting on the results, UFlex Group President (Finance & Accounts) and CFO Rajesh Bhatia said, “Q1 FY2020-21 has been a quarter of great progress for UFlex. The demand for pouching saw a huge increase led by personal hygiene category.

“There has been a steady improvement in BOPP-BOPET price spread in the last one year and we expect that the margins will remain healthy in the medium term.”

All this was reflected in Uflex’s quarterly performance via higher sales volumes, huge surge in profitability and much healthier EBITDA margins of 21.1 per cent, he added.

“Even amidst the lockdown, we were able to complete the construction of our new facilities in Poland and Russia and start trial runs,” Bhatia said.

The company operates in multiple countries across the globe - both in terms of its manufacturing operations and the markets for its products, and all these countries had imposed lockdowns of varying types aimed at containing the spread of the virus, Uflex said.

The company faced initial administrative and supply chain challenges in some countries during initial lockdown period, but there was no impact on its overall production and sales volumes during the quarter, it said.

“While Uflex believes that its business will continue to remain unscathed by the pandemic as it continues to witness higher demand for its products globally so far in FY 2021, there could be uncertainties in the future due to underlying developments with respect to COVID-19, which are difficult to predict,” it said.

Shares of Uflex on Tuesday settled 0.09 per cent higher at Rs 337.55 on the BSE.

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