Horlicks sales drop as consumers curtail food spending

Unilever Consumer Care Limited registered a decline in the sales of its two key products – health food drink Horlicks and powder drink GlucoMax D – as consumer spending went down significantly amidst economic slowdowns both in the global as well as domestic fronts.

In the second quarter (April-June) of 2022, Horlicks sales went down by nearly 23 per cent, while the glucose powder sales plummeted by 40.5 per cent in comparison with the Q1.

Horlicks, the company’s top selling product, accounts for as much as 90 per cent of its total revenue income.

When contacted, spokesperson of Unilever Consumer Care Limited Shamima Akter, told The Business Post, “We saw consumers getting increasingly attracted to buy mini packets instead of bottled Horlicks in recent times, the prime cause for the decrease in sales in the second quarter.”

“Despite the sales of mini-packed Horlicks surged sharply, total sales turnover fell because of the decreased sales of bottled Horlicks” she said.

“Amid the ongoing global economic worries, Bangladesh’s inflation rate also increased in recent months, leading to a fall in consumer spending,” Shamima said, adding that the company’s total income may have decreased at the year-end too because of the ongoing economic crisis.

As per the company, its principal operations include the manufacturing and marketing of consumer healthcare products, including health food drinks and powder drinks.

The company posted a revenue income of Tk121.47 crore in the Q1 of the current year, versus Tk114.43 crore in the same period last year.

The company’s gross profit stood at Tk65.65 crore during that time, compared to the tally of Tk63.64 crore in the first quarter of last year.

In the Q1, the company’s net profit jumped by 40 per cent to Tk105 crore on a year-on-year basis.

Unilever’s total revenue income went down by 25 per cent in April-June compared to January-March.

The company generated a revenue income of Tk90.77 crore in the Q2.

The Horlicks sales stood at Tk81.11 crore in the Q2, while the glucose sales totaled at Tk9.67 crore meantime.

In 2020, Unilever Overseas Holdings BV had acquired an 82 per cent stake in GlaxoSmithKline (GSK) Bangladesh Ltd.

To this end, Unilever purchased 98.75 lakh units of shares from Setfirst Ltd, a subsidiary of GSK.

A source at the company with knowledge of the matter said, after acquiring GlaxoSmithKline’s stake in 2020, Unilever management took steps to boost sales with lowering operating costs.

The company had logged earnings per share (EPS) of Tk14.99 for the April-June 2022 period as against Tk8.39 in the same quarter a year back.

Its net asset value (NAV) per share was Tk108.20 as of June 2022 and Tk122.88 as of December 2021.

The share price of Unilever Consumer Care remained unchanged at Tk2,946.7 per share on the Dhaka Stock Exchange on Wednesday.

Unilever’s paid Tk2,046.3 to buy each of the shares, amounting the total value at Tk 2,020.75 crore.

Unilever Consumer Care posted a net profit of Tk52.76 crore in 2021 and disbursed a 440 per cent cash dividend among its shareholders.