P&G India's Net Profit Is Down By 18 Percent In 2021-22 Due To Higher Raw Material And Utility Costs
P&G India's Net Income Is Down In 2021-22 By 18 percent As Input Costs Bite
The largest consumer goods maker in the world, India's Procter & Gamble (P&G) sales increased by 8 percent year-on-year in 2021-22, whilst the company's net income dropped by 18 percent, implying pressure on input costs in spite of increased prices.
The consumer goods maker based in Cincinnati declared sales of INR 13,985 crore along with a net income of INR 1,334 crore surpassing four Indian companies shaving products maker Gillette, P&G Home Products, pharmaceuticals firm P&G Health, P&G Health & Hygiene.
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According to regulatory filings sourced fromgistered entity that produces Pantene shampoo, Tide detergent, and Pampers diapers, saw the most significant impact, with a gain lower by 43 percent to INR 277 crore on net sales of INR 6,668 crore, an increase of 5 percent.
A spokeswoman from P&G stated that unusual blows with cost inflation and commodity, and a one-time tax associated help during the base period, affected the year's profit. In spite of this, the company has given a strong performance in the financial year by raising the top line and notably counteracting the headwinds impact with actions on pricing and cost productivity during the year.
Costs of crude and palm oil, primary ingredients for shampoos, soaps, and detergents, climbed by 60 percent, whilst the cost of packaging material rose by 20 percent in the previous fiscal compared to last year. The costs of the commodity and supply chain were further fuelled by Russia's invasion of Ukraine.
Founder of business intelligence firm AltInfo, Mohit Yadav, the input material's price significantly rose, and the company's revenue did not grow proportionally. This, mixed with a spike in finance costs, negatively impacted the bottom line of the company.
India's P&G is mainly competing with Hindustan Unilever, Unilever's local unit in shampoo and laundry segments, along with Unicharm, a Japanese firm in diapers. The company holds more than half of the diapers, sanitary napkins, and shaving razors market, along with a fifth of the laundry and shampoo categories.
Sales Of P&G Increased in Q4, But Careful on Fiscal 2023 Outlook
Sales of Procter & Gamble increased by 3 percent during the fourth fiscal quarter; however, the globe's biggest consumer products manufacturer delivered a lacklustre 2023 financial sales forecast as it competes with increasing commodity and freight costs.
The Cincinnati-based company's shares dipped by around 5 percent at Friday's market opening.
Like many companies, P&G deals with consumers drawing back from their expenditures as they stress over inflation and a potential recession.
Jon Moeller, Chairman and CEO, stated in a conference call that the operational expense and currency challenges they faced in the past two years will persist in fiscal 2023. They started the new fiscal year with consumers encountering levels of inflation not witnessed in the previous 40 years.
In spite of the growing consumer concerns, the revenue of P&G rose to USD 19.52 billion compared to USD 18.9 billion throughout the quarter on the back of higher prices. This outperformed the USD 19.39 billion, which was surveyed by analysts at Zacks Investment Research.
The company's registered sales growth in its health care, home care, fabric, baby, feminine and family care segments. Its trademarks include Gillette razors, Tide detergent, and Pampers diapers.
In the April-June period, P&G earned USD 3.05 billion, or USD 1.21 per share. That's lower by 2 cents than what Wall Street anticipated.
Fiscal 2022 sales of the company were reported at USD 80.2 billion, and the per-share earnings of USD 5.81.
For fiscal 2023, P&G predicted the sales to be flat to up by 2 percent compared to last year. Profits are expected to be flat to up by 4 percent in comparison to last year's USD 5.81 per share.
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As per Procurement Resource, the article states that the largest consumer goods maker in the world, India's Procter & Gamble (P&G), witnessed an increase in sales by 8 percent year-on-year in 2021-22, whilst the company's net income dropped by 18 percent, implying pressure on input costs in spite of increased prices. A P&G spokeswoman stated that unusual blows with cost inflation and commodity and a one-time tax associated with help during the base period were all factors that affected the year's profit. Despite this, the company's overall performance in the financial year was strong. Furthermore, Sales of Procter & Gamble increased by 3 percent during the fourth fiscal quarter; however, profits remain lower by 2 percent than what was expected.