Unilever Consumer Care Limited (formerly known as GlaxoSmithKline Bangladesh Limited) has recently published its quarterly report for the period Jan’21-Mar’21. Revenue of the company grew by 13.8% YoY from Tk 1,006 million to Tk 1,144 million. The growth in revenue is mainly driven by higher quantity sales of Health Food Drinks. However, profit from continued operations declined by 31.8% from Tk 180.1 million to Tk 122.9 million.
Revenue & Gross Profit Analysis
Revenue has been increased by 13.8% YoY. The growth is mainly attributed to higher consumer spending in Jan’21-Mar’21 period when the infection rate for Covid-19 was very low in the country. The gross profit declined by 1.4% mainly due to a lower gross margin. The gross margin in Q1’21 was 44.4% which was 51.2% in Q1’20. The de-growth in gross profit is mainly driven by higher raw materials cost & affordable pricing strategy to reach low-income groups.
The trading profit of the company increased by 19.5% YoY mainly due to lower operating expenses. Operating expense decreased by 13.9% YoY. Profit from continued operations decreased by 31.8% mainly due to higher other expenses and lower finance income compared to Q1’20. Other expenses increased from Tk 1.9 million in Q1’20 to Tk million 54.8 million in Q1’21. Other expenses include accrual of Tk 60 million for Technical Assistance Fees, Trademark and Technology fees which are payable to Unilever Europe Business Centre B.V & Unilever PLC, UK. The reduction in finance income is mainly attributable to the low-interest rate in deposits.
The growth in revenue is a clear indication that Unilever is effectively using its distribution channel to drive higher sales of Health Food Drinks. Horlicks, Boost, Maltova & Glaxcose D are well-known brands in the country and the distribution strength of Unilever will only help the company to drive higher sales in the future. However, since April the infection rate of Covid-19 has increased exponentially, and the government has imposed a lockdown.
Read More: HSBC digitalizes Unilever’s supply chain finance.
If the lockdown prolongs for a longer period, then it is likely that consumer spending will go down which may impact the revenue growth of the company.
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