Coca-Cola 2020-21 earnings: Coca-Cola FY21 profits declined 16%; bottling arm HCCB’s net dropped 93%

New Delhi: Beverage maker Coca-Cola India reported a 16 per cent year-on-year decline in revenues for the financial year 2020-21 at Rs 2,355 crore, according to the company’s filings in the Registrar of Companies (RoC) accessed by business intelligence platform Tofler. The maker of Coke and Thums Up soft drinks and Kinley water further reported a 28 per cent decline in net profit at Rs 443 crore during the same fiscal, a year severely impacted by the outbreak of the Covid-19 pandemic. The company’s total expenses for the fiscal were reported as Rs 1,741 crore, the data sourced by Tofler said.

Further, Coca-Cola’s bottling arm Hindustan Coca-Cola Beverages (HCCB) revenue declined 29 per cent in the financial year 2020-21 at Rs 7,004 crore, compared to the previous financial year, according to HCCB’s financial filings also accessed by Tofler. HCCB, which makes and sells soft drinks Coke, Thums Up and Sprite besides juices and ice tea, reported a steep 93 per cent year-on-year decline in net profit at Rs 72 crore, amid the pandemic-hit year, marred by supply chain disruptions, lockdowns, restaurants, cafes and cinema theatres shut down, and reverse migration of workforce.

HCCB’s total expenses for the fiscal were reported as Rs 6,902 crore.

“Being in the FMCG Industry, the company continues to be impacted by restrictions. However, the company believes that its business will return back to normalcy by the end of financial year 2021-22,” Coca-Cola wrote in its financial declaration note.

Beverages sales volumes were adversely impacted in the peak season due to the nationwide lockdown called by the government last March, on the eve of peak season for soft drinks. The strict nationwide lockdown and subsequent restrictions on travel, hotels, restaurants and cafes, theatres, schools and colleges and entertainment complexes even after some stringent lockdown curbs were eased, severely affected peak season demand as summer months alone account for the majority of annual packaged beverage sales.

However, in the September quarter this year, the company has staged a recovery on the back of reopenings and positive buying sentiment. Globally, Coca-Cola reported 6 per cent growth in unit case volume in the September quarter, outpacing sales in 2019, which is attributed to developing and emerging markets such as India, China, Russia and Brazil. The company said it saw “solid performance” by its fruit drink brand Maaza in India. Apart from in-home consumption, the maker of Coca-Cola and Thums Up colas and Minute Maid juice said it is recovering in out-of-home channels, as travel picks up, and hotels, restaurants and bars open. In its detailed earnings statement, the company said Coca-Cola India is emerging stronger on the back of a strong recovery in “away-from-home” channels with improved mobility, focus on affordability and omnichannel growth.