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Nestle Q4 result: Profit falls 20%, declares final dividend of ₹65 a share

By Priyanka Verma 
Updated Date

New Delhi: Fast moving consumer goods (FMCG) major Nestle Ltd’s board on Thursday,February 17, approved a final dividend of ₹65 per share, according to an official statement.The record date for the purpose of determining entitlement of the members to the Final Dividend for the year 2021 is 8 April 2022.

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The company’s net profit fell 20% to ₹387 crore for the fourth quarter ended December as compared to ₹483 crore in the corresponding quarter of last year.

Nestle follows a January-December financial year. Sales during the reporting period rose 8% to ₹3,706 crore as against ₹3,417 crore in the same period last year.

On Thursday, after the results announcement, Nestle shares were trading down 0.34% in noon deals at ₹116.90 apiece on NSE.

Suresh Narayanan, Chairman & Managing Director, said, “Nestlé India witnessed broad based, double digit, volume and mix led growth, despite a highly volatile economic environment”. “2021 was a very challenging year and I am proud of the determination of the team, our partners and stakeholders to face the context and continue to be inspired to grow,” he added.

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“Strong growth momentum continued in MAGGI Noodles aided by increased availability, KITKAT and MUNCH registered stellar growth throughout the year while NESCAFÉ Classic continued to deliver double digit growth”, he added while commenting on the performance for the quarter.

The domestic sales for the quarter increased 9.2 percent which was broad based and largely driven by volume & mix. Export Sales were lower by 6.6 percent largely due to change in product mix

EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter came in at Rs 866 crore with a growth of 11 percent on year compared to Rs 777 crore last year. On a sequential basis, the EBITDA is lower by 9 percent due to higher other expenses.

Consequently, EBITDA margins for the quarter improved by 50 bps on year to 23.2 percent while there was a decline of 130 bps on a sequential basis.

“We continue to witness high inflation in our key raw and packaging materials, where many are at 10-year highs”, added Narayanan. “However, we remain confident of our ability and competencies and will continue to make all efforts towards cost optimization and seeking systematic efficiencies to mitigate the impact”.

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Net margins however, declined both on year as well as sequential basis, due to lower other income and higher depreciation expenses.

Net margins for the quarter came in at 10 percent with a decline of 3.7 percent on year and 5.6 percent on quarterly basis.

Commodity Outlook

Price outlook for key categories like edible oils, coffee, wheat, fuel remains firm to bullish while costs of packaging materials continue to increase amid supply constraints, rising fuel and transportation costs, the company said in its release.

Input prices are expected to be on bullish trend both globally and to some extent locally. Fresh milk prices are expected to remain firm with continued increase in demand and rise in feed costs to farmers.

“In an environment of raw and packaging material inflation, we continue to keenly look for opportunities for cost optimization and efficiencies”, the company said.

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