Hindustan Coca-Cola Beverages net profit down 92% in FY 2020-21

Hindustan Coca-Cola Beverages (HCCB), the bottling arm of the Coca-Cola Company in India, posted a net profit of ₹71.62 crore in FY 2020-21 witnessing a sharp decline of 92.6 per cent against Rs 974.52 crore in FY 2019-20. The company attributed the dip in profit to the impact of the pandemic outbreak, which hit the supply chain as well as the out-of-home channel. But the beverage major added that it witnessed strong recovery trends in the second half of FY20-21 and has also made additional investments for expansion.

HCCB also pointed out that its net profit had surged in FY 2019-20 owing to divestment of its bottling operations in North India to its franchise bottling partners.

A spokesperson for HCCB told

BusinessLine , “The net profit declined by 92 per cent to ₹716 million from ₹9,745 million in the financial year 2019-20 primarily on account of the net profit, including profit on sale of the north territory business pursuant to Business Transfer Agreements (BTA). On a comparable basis (excluding BTA), the net profit declined by 83 per cent over 2019-20 on account of the Covid‐19 pandemic induced impact, specifically in Q1.”

According to the company’s ROC filing, sourced from business intelligence platform Tofler, total revenue in FY 2020-21 stood at ₹7,003.87 crore down 29.19 per cent compared to ₹9,892.39 crore in FY 19-20. Revenue from operations stood at ₹6,956.02 crore down 29 per cent compared to the previous fiscal.

Supply chain disruptions as a result of the pandemic outbreak started with restrictions on movement of goods, closure of borders in several States, followed by a nationwide lockdown from the 25th of March 2020, the beverage major added.

“The company, however, witnessed a sequential month on month recovery in Q2 and Q3 of 2020, and closed the year with strong double digit revenue growth in the last quarter. The recovery in the second half of the financial year was attributed to gradual relaxation of movement restrictions, as well as the company’s focus and effort in strengthening market execution, leveraging emerging channels, and simplifying pack price architecture,” the company spokesperson added.

Expansion

Meanwhile, HCCB said it continued to make investments to strengthen its manufacturing footprint.

“HCCB strongly believes in the long-term prospects of the Indian market and continues to invest for future growth. The company has made additional investments of ₹6,211 million in property plant and equipment during the year including setting up of four additional manufacturing lines at its manufacturing facilities in Tamil Nadu, Karnataka, Telangana, and Gujarat,” the statement added.