VBL shrinks Q4 loss to Rs 7 crore from Rs 54 crore y-o-y

Varun Beverages Ltd (VBL), a key player in the beverage industry and one of the largest franchisee of PepsiCo worldwide, said on Tuesday its losses reduced significantly to Rs 7.24 crore during October to December.

The company, which follows calendar year as its financial year, had posted a net loss of Rs 53.95 crore in Q4 2019.

For CY 2020, however, profit after tax decreased by 24 per cent to Rs 357 crore primarily because of 64.7 per cent decline in Q2 due to Covid-19 lockdown restrictions imposed by the government.

Depreciation decreased by 1.6 per cent during the quarter but increased by 8.2 per cent in CY 2020 as the effect of acquisition of south and west India sub-territory from May 1, 2019 in the base year.

Finance cost declined by 21.6 per cent during Q4 and by 9.2 per cent in CY 2020 due to repayment of debt as well as lower average cost of borrowing.

Revenue from operations (net of excise/GST) grew by 9.1 per cent year-on-year in Q4 2020 to Rs 1,331 crore.

With faster-than-expected recovery witnessed across the territories, VBL managed to close the pandemic-hit year with a decline of 9.5 per cent in revenue from operations to Rs 6,450 crore in CY 2020 as against a 41.6 per cent revenue decline during its peak quarter of Q2 2020.

Total sales volumes (orgc) were up by 5.7 per cent year-on-year at 87.1 million cases in Q4 2020. For CY 2020, total sales volumes declined by 13.7 per cent year-on-year to 425.3 million cases and orgc sales volumes declined by 20.8 per cent because of decline in Q2 2020 where volumes declined by 46.4 per cent.

Realisation per case improved by 4.8 per cent in CY 2020 due to favourable mix and improvement in realisation in the international markets. Carbonated soft drinks constituted 72.6 per cent, juices 6.3 per cent and packaged drinking water 21.1 per cent of total sales volumes in CY 2020.

Chairman Ravi Jaipuria said the spread of Covid-19 pandemic in early March 2020 caused significant disruptions in the company's business operations, particularly during the seasonally strong period of April to June quarter.

"With overall economic activity picking-up sharply across the country, there is an improved consumption trend being witnessed on a month-over-month basis. This bodes well for all our product categories over the medium-to-longer term."

At 1:15 pm, the company's stock was trading 4.5 per cent lower on BSE Ltd at Rs 900.90 per unit.

( With inputs from ANI )