Reckitt’s sales decline as no more panic buying of hygiene products
The cuts in marketing cost and corporate tax helped the company see a 9.4% profit growth and record dividend
The 2020 sales bonanza of hygiene products did not last for Reckitt Benckiser Bangladesh as consumers put a hold on their panic buying of Dettol, Lysol or Harpic in 2021.
Reckitt has not yet disclosed its annual sales for 2021 but sources in the company told The Business Standard that they were roughly 7% down from the previous year.
Consumers are still buying hygiene products more than they did before the pandemic, but the pace is slower than during the first wave, they said.
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The multinational company posted a 9.4% growth in its annual profits for the second year of the Covid-19 pandemic and recommended its highest ever Tk165 cash dividend against each share of Tk10 on face value.
Thanks to the cut in its marketing expenses and the corporate tax rates.
Reckitt Benckiser Bangladesh Ltd on Thursday disclosed its annual earnings per share (EPS) of Tk171.03, which was Tk156.38 in 2020.
Everyone's rush for hygiene products, especially hand sanitisers and germ killers during the first wave of Covid-19 temporarily resulted in a supply shortage in the market and companies catered to the market with increased production over the year.
In 2020, Reckitt's sales increased 29.27% to over Tk533 crore as it saw a much-widened base of customers buying Dettol, Lysol and Harpic, while the existing customers also were using those in larger quantities.
Since late-2020, the demand for hygiene products began to rationalise with the easing of virus fear.
In 2020, the company spent a lot to create mass awareness about the strengths of its products and in the next year, it slashed the spending, according to Reckitt's third quarterly statement.
Company officials said the same continued up to the year-end. The corporate tax rate cut by 250 basis points also helped the company save some in the bottom line.
Reckitt Benckiser Bangladesh was listed on the Dhaka Stock Exchange in 1987.
The asset-slim company with a meagre paid-up capital of Tk4.73 crore has been breaking its profit records at least in each of the last six years.
Low cash retention every year kept the company's net asset value per share as low as Tk200 at the end of 2021.
Amid no increase in the number of shares since 1996, Reckitt Benckiser Bangladesh became the priciest stock in the local bourses.
On Sunday, Reckitt Benckiser shares closed 1.66% lower at Tk5,372 at the DSE.
