Nestle's Q3 results indicate Maggi recall impact far higher than estimates
Manjiri Meshram / 30 Oct 2015
Recently, Nestle reported its Q3CY15 results, the drop in sales numbers to Rs 1736.2 crore, decreased by 32.1 per cent over the same period in 2014, largely due to the impact of Maggi noddles issue. The Net Domestic Sales declined by 33.8 per cent. Export sales reduced by 6.4 per cent impacted by Maggi issue and lower sales to Nepal due to blockage of the border in the last week of September, 2015.
Nestle India is a food processing - Dairy company. The company brands are NESCAFE, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE, MILKMAID and NESTEA, NESTLE Milk, NESTLE SLIM Milk, NESTLE Fresh n Natural Dahi and NESTLE Jeera Raita. The company's operating segment is food.
Recently, Nestle reported its Q3CY15 results, the drop in sales numbers to Rs 1736.2 crore, decreased by 32.1 per cent over the same period in 2014, largely due to the impact of Maggi noddles issue. The Net Domestic Sales declined by 33.8 per cent. Export sales reduced by 6.4 per cent impacted by Maggi issue and lower sales to Nepal due to blockage of the border in the last week of September, 2015.
Nestle posted a 10.97 per cent decline in its net sales to Rs 1736.2 crore compared to Rs 1957 crore on sequential basis. Its total expenses decreased by 5.47 per cent to Rs 1545 crore Q-o-Q basis. EBITDA reduced by 27 per cent to Rs 288 crore, EBITDA margin contracted by 364 basis points on quarterly basis. Other Income of Nestle also declined by 9.66 per cent to Rs 27.22 crore Q-o-Q basis. Nestle managed to post a Net Profit of Rs 124.2 crore in its Q3CY15 from a loss of Rs (-64.4) crore in Q2CY15.
The Maggi issue disrupted the business. The company faced an unusual situation and continued to deal with it during the quarter. Therefore, the financial results are not comparable to previous periods.
Commenting on the financial results, Nestlé's managing director Suresh Narayanan said, “Quality and safety of our products are priorities, which are non-negotiable. We take pride that our consumers, partners and stakeholders have stood by us during the current situation and we are humbled and overwhelmed by the messages of love and support we receive each day. We have commenced manufacturing and after clearance of the samples to be tested by the three accredited laboratories, are keen to reintroduce your Maggi noodles at the earliest.”
The FII holdings of Nestle reduced by 49 basis points to 12.17, DII holdings increased by 47 basis points to 4.88 per cent. Today, Nestle is trading at Rs 6225, around 1 per cent lower on BSE.
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