Buoyed by healthy profits from its FMCG vertical, ITC today reported a 9.97 per cent rise in net profit at Rs 808.99 crore for the quarter ended March 31, 2009, against Rs 735.64 crore for the same period in the previous year.
This was in spite of a rise in commodity prices. However, the net sales of the company saw a marginal decline of about 1 per cent at Rs 3,891.81 crore, compared with Rs 3934.39 crore in the year-ago period.
"For the fourth quarter, the net turnover registered a fall of 1 per cent due to lower exports of agri-commodities consequent to adverse market conditions," said a press release from the company.
For the whole year, the net turnover of the company was Rs 15,388 crore, a growth of 10.30 per cent over the last fiscal, mainly driven by the 20 per cent growth in non-cigarette FMCG businesses.
The total expenditure for the company in the quarter under review was Rs 2,774.21 crore – about 7 per cent less than in the same period last fiscal.
The hotels division saw a 50.20 per cent decline in profit before tax (PBT) in the quarter. The agri business also witnessed a 51.22 per cent decline in net revenue on the back of weak exports, except tobacco leaves. However, its PBT increased by about 43. 37 per cent.
The net FMCG revenue in the quarter under review was Rs 2,848.34 crore, against Rs 2,467.49 crore – a rise of about 15.43 per cent.
The total FMCG vertical's PBT for the company in the quarter rose to Rs 964.07 crore, against Rs 752.17 crore in the same period last fiscal – a rise of about 28.17 per cent.
"The continuing impact of high commodity prices and store rentals, brand-building costs on the new personal care portfolio and the significant investments in augmenting the distribution infrastructure and systems combined to exert intense pressure on profitability during the year," the company said.
The cigarettes division, which accounts for roughly 48 per cent of the net revenue for the company, saw its PBT rise by 24.28 per cent in the quarter ended March 31, 2009 to Rs 1,081.35 crore, against Rs 870.06 crore for the same period last fiscal.
The net revenue from cigarettes went up by 16 per cent to Rs 2,011.54 crore in Q4, against Rs 1,730. 23 crore in the same period last fiscal.
This was despite the extraordinary increase of 140-390 per cent in the rates of excise duty on non-filter cigarettes in the 2008 Union Budget, close on the heels of a 30 per cent increase in tax incidence in the previous year.
Together, both drove the organised cigarette industry to vacate the non-filter category substantially, according to a company press release.
In the FMCG division, net revenue from non-cigarette division for the quarter rose by about 13.50 per cent to Rs 836.80 crore. However, PBT in the segment was almost flat at Rs 117.28 crore for the quarter ended March 2009, against Rs 117.89 crore in the same period last fiscal.
In lifestyle retailing (which consists Wills Lifestyle brand and John Players brand), the company is actively renegotiating rentals, closing down unviable stores and implementing a series of cost management measures to boost retail and supply chain productivity, according to a company press release.
In the hotels business, the net revenue was Rs 221.03 crore for the quarter ended March 2009, against Rs 312.54 crore in the same period last fiscal, a fall of about 29 per cent.
