Nestle said its total sales grew at 2% while domestic sales grew at 2.6%. The companys export sales declined by 9.3%. Sales were adversely impacted due to the COVID-19 induced lockdown leading to production disruption across factories. Demand in out of home channel was also severely reduced, the company added.
Profit before tax declined 1% to Rs 652.27 crore in Q2 June 2020 over Q2 June 2019. Total tax expense declined 25% year on year to Rs 165.67 crore in Q2 June 2020.
On an average, the factories were operating at 75% of capacity during the quarter. In the quarter, the company has incurred Rs 28.60 crore of incremental costs specifically related to COVID-19, which are part of the results.
Commenting on the results, Suresh Narayanan, chairman and managing director, Nestle India said, The past three months have witnessed volatility, uncertainty and stresses that we had never imagined before nor experienced. This led to disruptions across the value chain of the company that has impacted our results, though we have built back momentum strongly as we ended the quarter. Relentless efforts, determined professional actions and abiding teamwork has led us to restore our eight factories almost to their pre-COVID manufacturing capabilities and our distribution capacity goes from strength to strength.?
?We delivered strong performance in the e-commerce channel which grew by 122% this quarter and now contributes 3.6% to domestic sales. The demand in all Out of Home consumption channels experienced a sharp decline due to the lockdown. However Nestl? brands enjoy trust, credibility and strength as far as ?in home consumption? is concerned and this boosted sales of EVERYDAY Dairy Whitener, Nestl? a+ Milk, other milk based portfolio, NESCAF? Classic and NESCAF? Sunrise, all of which performed well this quarter. MAGGI also witnessed solid growth towards the end of the quarter after initial supply constraints. Overall, we accelerated our digital engagements across key parts of our portfolio, put out innovative campaigns to engage the consumers in many, while ensuring judicious application of marketing spends in line with the current business scenario.?
Shares of Nestle India fell 1.41% to Rs 17098.95. The result was announced after market hours today, 28 July 2020.
Nestle India operates in the Food segment. The firm food business incorporates product groups, which include milk products and nutrition, beverages, prepared dishes and cooking aids, and chocolate and confectionery.
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