Emami net profit remains flat, hit by demonetisation

FMCG major Emami Ltd on Monday reported a marginal increase in its consolidated net profit (after taxes, minority interest and share of profit of associates) to Rs 134.34 crore for the quarter ended December 31, 2016, as compared to Rs 134.28 crore in the corresponding quarter last financial year.
It posted a resilient performance during the quarter despite depressed domestic market sentiments resulting in lower off-takes and challenging geo-political conditions in overseas markets, the company said.
Its turnover in the quarter under review at Rs 726 crore posted flat growth due to severe liquidity crunch in domestic markets and poor economic conditions in Middle Eastern countries.
“Despite the liquidity crunch owing to demonetization, the company’s domestic business delivered a topline growth of 3 per cent during the quarter,” a company statement said.
In the international business, globally, business environment continued to be volatile and challenging.
The FMCG company said while Bangladesh delivered good growth, worsening geo-political situation in MENAP (Middle East, North Africa, Afghanistan, and Pakistan) region and Africa impacted the sales in those regions adversely.
“While international business, excluding MENAP region, grew by 10 per cent in third quarter (Q3), overall it de-grew by 16 per cent in Q3,” it said.
“Despite challenging domestic and international macro- economic factors, the company has been able to perform satisfactorily. While liquidity crunch and sales channel disruption impacted the off-take of some of our brands in domestic market, challenging geo-political situation particularly in Middle East, Africa and other countries impacted the international performance to some extent,” said company’s Director Mohan Goenka.
With the post-demonetization situation improving and the consumer sentiment getting back on track gradually, the company is poised to capture this positive sentiment and target a good performance in the days to come, he said.