Colgate-Palmolive (India) (500830) Q4 97/98 earnings summary

Executive summary

• FY1997-98 gross sales reached Rs 989.07 crore vs Rs 960.60 crore; net sales rose to Rs 945.91 crore from Rs 904.54 crore, while profit after tax was Rs 80.07 crore vs Rs 78.93 crore.

• Competitive pressure and sluggish consumer demand prompted higher advertising investment and launches of Colgate Double Protection and Colgate Total.

• Strategic investments included a Nepal manufacturing facility, Powai research centre, SAP system, Dicalcium Phosphate production and a regional distribution centre.

Financial highlights

• Profit before tax was Rs 127.01 crore vs Rs 143.93 crore; profit after tax was Rs 80.07 crore vs Rs 78.93 crore.

• Other income was Rs 16.28 crore vs Rs 17.62 crore; total income was Rs 1,005.35 crore vs Rs 978.21 crore.

• Materials cost declined to Rs 530.90 crore from Rs 542.01 crore; other expenses increased to Rs 252.31 crore from Rs 192.43 crore.

• Gross sales were Rs 989.07 crore vs Rs 960.60 crore; sales net of excise were Rs 945.91 crore vs Rs 904.54 crore.

Outlook and guidance

• Consumer-goods demand remained sluggish amid a continuing industrial slowdown and lower agricultural production.

• The Board expected investments in products, research, technology and distribution to strengthen long-term competitiveness and operations.

• Colgate-Palmolive (Nepal) began commercial production in July 1998; SAP went live the same month, with benefits expected from progressive implementation.