Nestlé India Ltd. reported a 60% drop in its net profit for the July to September period as its sales fell sharply after the withdrawal of Maggi noodles from retail shelves during this quarter.
The Indian arm of Nestlé SA said its profit slipped to 1.24 billion rupees (USD19 million) in the last quarter, compared with 3.11 billion rupees a year earlier. Its revenue declined 32% to 17.36 billion rupees.
“The Maggi issue disrupted business,” the company said in a release to BSE.
Export sales also decreased by 6.4% on the scare and lower sales to Nepal due to the blockage of the country’s border with India in the last week of September, the company added.
India’s food safety watchdog slapped a nationwide ban on the noodles in June, saying lead levels exceeded statutory limits. But the Bombay High Court, overturned the ruling two months later, calling it “arbitrary” and ordered fresh tests.
However, the company said its own tests didn’t detect high levels of the toxic metal and a court ruling in August ordered Indian authorities retest samples of the noodles. Fresh tests cleared the samples earlier this month.
Nestlé India has resumed manufacturing the noodles in India and is keen to reintroduce its Maggi 2-Minute Noodles to shelves at the earliest, said Suresh Narayanan, chairman and managing director of the company.
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