FMCG major Marico has reported a consolidated net profit of Rs 1,085 crore for the full financial year ended March 31, 2020 (FY20), as compared to Rs 1,113 crore in FY19. Consolidated revenue was flat at Rs 7,439 crore in FY20 against Rs 7,437 crore in the previous year.
In the year ended March 31, 2020, net sales was at Rs 7,315 crore, with a domestic volume growth of 1 per cent and constant currency growth of 5 per cent in the international business.
For the January-March quarter of FY20, Marico reported a sharp 50.6 per cent decline in consolidated net profit at Rs 199 crore compared to Rs 403 crore in the same period last year, dented by coronavirus-led nationwide lockdown in the last week of March and higher base in a year-ago period.
Net sales was down 7 per cent YoY at Rs 1,496 crore, with domestic volume growth declining by 3 per cent due to COVID-19 pandemic.
Marico's India business recorded revenue of Rs 1,146 crore, down 8 per cent on a year-on-year basis, in the March quarter. The operating margin improved to 22.8 per cent in Q4FY20 as against 21.5 per cent in Q4FY19 despite an unfavourable portfolio mix, partly due to rationalised spending on advertising and promotion (A&P) and tighter cost controls.
A&P spends in Q4FY20 which stood at 8.4 per cent of sales were down 109 basis points (bps) YoY largely due to high spends on new products in the base quarter and rationalisation of spends on discretionary segments of the portfolio. The company continued to invest in the core, it said.
While operating profit or EBITDA (earnings before interest, taxes, depreciation, and amortisation) was down 4 per cent YoY, gross margins improved marginally by 22 bps.
"With COVID-19 turning into a pandemic, the overseas geographies were also impacted in varying degrees. The International business declined by 6 per cent in constant currency terms with MENA and South Africa businesses posting sharp drops, while Bangladesh and Vietnam still ended in the green, given relatively limited restrictions imposed in these regions in the month of March," Marico said.
Commenting on earnings, Saugata Gupta, MD & CEO, Marico said, "The unfortunate outbreak of COVID-19 and consequent lockdown has brought about severe hardships to various sections of our society... At this time, we are focusing on the movement of food and grocery items of daily use to our consumers, subject to all safety norms."
"While persistently soft consumption trends have led to muted volume growth in FY20, we have continued to gain market share in our core franchises on the back of our trusted leader brands. We will continue to invest behind our core portfolios, while also adapting to shifts in consumer behaviour that may be brought about by this unprecedented human crisis."
Gupta said that the company will continue to innovate with existing and new brands to meet these emerging consumer needs, while aggressively focusing on cost management and cash conservation in order to navigate through these challenging times.
Meanwhile, shares of Marico ended Tuesday's trade at Rs 296.05 apiece, up 4.10 per cent, against previous closing price of Rs 284.40 on the Bombay Stock Exchange.