Reckitt Benckiser suffers from surging raw material price
Reckitt Benckiser (BD) – a subsidiary of a British multinational consumer goods company – has witnessed a deterioration in profit due to surging raw materials prices.
As a result, despite an increase in revenue, it reported an 18% fall in profit in the first half of 2022.
According to its financials, during the January-June period, its profit stood at Tk23.94 crore, lower from Tk29.31 crore in the same time of 2021.
Keep updated, follow The Business Standard's Google news channel
Its revenue increased to Tk251.17 crore, slightly up from Tk250.76 crore.
However, the cost of goods increased by 18.64% to Tk134.21 crore as the price of raw materials kept increasing continuously.
After Covid-19 broke out in 2020, the toiletries giant reported good revenue owing to the huge demand for hygiene products.
When the pandemic eased down, the sales of its products and revenue declined.
Cost of goods sold rose 24% in Apr-Jun
Despite a 0.64% jump in revenue to Tk123.68 in the April-June period, the company has reported a 4% decline in net profit over the same time in 2021.
During the period, its revenue increased to Tk123.68, and the cost of sales to Tk69.25 crore.
Regarding the profit decline in the second quarter, the company said the cost of sales has increased by 24.33% due to the continuous price increase of key raw material soap noodles and huge unprecedented forex revaluation.
It also said, "We have optimised marketing expenses based on current circumstances, which contributed to the reduction of the operating expenses by 30% for the second quarter."
It also faced the same situation as the cost of goods sold increased by 13% in the first quarter.
During the January-March of 2022, its revenue increased but owing to an increase in raw materials cost, its net profit after tax declined to Tk9.10 crore, a 34% fall from Tk13.89 in the same time of 2021.
Reckitt Benckiser (BD) PLC, the manufacturer of hygiene products Dettol, Lysol and Harpic and so on, got listed on the share market in 1987.
Last year, the company made a profit of Tk80.81 crore and paid the highest 1650% cash dividend to its shareholders for 2021.
