Unilever Consumer Care sees drop in Q3 profits
Unilever Consumer Care, formerly referred to as GlaxoSmithKline, witnessed a drastic year-on-year fall in profits in the July-September quarter of the year because of low sales amid the ongoing coronavirus pandemic.
Besides, global supply chain disruptions have made it difficult to secure recycleables, resulting in a shortage of finished goods, said KSM Minhaj, ceo and managing director of Unilever Consumer Care.
Sales receipts dropped by 10.39 % to Tk 94.17 crore between July-September quarter while profits fell 44.74 % to Tk 14.07 crore through the same period, the listed multinational's financial report shows.
The decline in profits is because decreased sales, rising cost of recycleables, increased customs duty on dry mix ingredients (DMI) and scrapping of the enterprise resource planning system, the company said in a disclosure published on the Dhaka STOCK MARKET (DSE) website yesterday.
Unilever Consumer Care markets and sells around 400 brands in a lot more than 190 countries. Included in these are nutrition and oral healthcare products, led by brands such as for example Horlicks and Sensodyne.
"Our iconic health food drink brand, Horlicks, saw lower sales in the third quarter due to a shortage of imported DMIs," Minhaj said.
The business's profits were affected by the decision to increase import duties on DMIs from 15 per cent to 25 % alongside a price hike in other key ingredients like full cream milk powder.
"But regardless of the inflated import duty, we have reduced the price of Horlicks to make our nutritional products less expensive for our customers, since their purchasing power has been reduced after the Covid-19 outbreak," he added.
When news broke that Unilever Consumer Care, which still trades under the name of GlaxoSmithKline, registered reduced profits and sales for the quarter, the business's share price dropped 1.10 % to Tk 2,100 yesterday.
Even though sales have dropped, the price tag on goods sold rose by 38 % year-on-year to Tk 51.98 crore in the 3rd quarter, according to Unilever's quarterly financial report.
However, Unilever Consumer Care, a subsidiary of Unilever Bangladesh, did see its profits grow by 2.49 per cent in comparison to the second quarter (April-June), when the coronavirus outbreak was at its peak.
In June, Unilever spent about Tk 2,020 crore to get more than 82 % of GlaxoSmithKline's (GSK) health food and drinks business in Bangladesh from Setfirst, a corporate director of the business.
Earlier in 2018, GSK Bangladesh, a subsidiary of the British multinational company GSK Plc, shuttered its 60-year-old pharmaceuticals business in Bangladesh.
The business was listed with the Dhaka Stock Exchange in 1976 and has disbursed over 500 per cent cash dividend at least going back five years.
