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Varun Beverages Ltd, PepsiCo’s largest franchise bottler, on Monday reported 36 per cent rise in consolidated net profit at Rs 195.64 crore for December quarter 2024 driven by volume growth and improved margins.
The company, which follows the calendar year as its financial year, had posted a net profit of Rs 143.76 crore during October-December period a year ago, according to a regulatory filing from VBL.
Revenue from operations was higher at Rs 3,817.61 crore during the fourth quarter as against Rs 2,730.98 crore in the corresponding period last fiscal.
The “EBITDA increased by 38.7 per cent to Rs 579.97 crore from Rs 418.29 crore,” it said in an earning statement.
Total expenses were at Rs 3,607.43 crore as against Rs 3,862.25 crore earlier.
For the full year 2024, consolidated net profit was up 25.3 per cent to Rs 2,634.28 crore. Revenue from operations was higher at Rs 20,481.32 crore as against Rs 16,321.06 crore in 2023.
Moreover, in 2024, “mix of low sugar / no sugar products increased to 53 per cent of our consolidated sales volumes from 42 per cent in CY2023,” it said.
In 2024, EBITDA margin improved by 105 basis points to 23.5 per cent, driven by improvement in gross margins which was partially offset by consolidation of the South African market (BevCo, a South African bottler which it acquired in March 2024) and fixed cost of new capex yet to the utilised to full potential, it added.
Commenting on the outlook VBL Chairman Ravi Jaipuria said, ”India volumes grew 11.4 per cent, reflecting the strength of our distribution network and operational execution.”
While consolidated volumes increased by 23.2 percent, largely led by new territories, revenues increased by 25 per cent and PAT by 25.3 percent, he added.
In March 2024, VBL acquired The Beverage Company, South Africa along with its wholly-owned subsidiary BevCo.
“This acquisition allowed the company to consolidate its presence in franchised territories in South Africa, Lesotho, and Eswatini, as well as territories with distribution rights in Namibia, Botswana, Mozambique, and Madagascar,” it said.
On 13 November 2024, VBL entered into a share purchase agreement with Tanzania Bottling Company SA and SBC Beverages Ghana for purchase of 100 per cent at an equity value of $154.50 million for Tanzania and $15.06 million for Ghana. Both are PepsiCo’s business.
“The acquisition is expected to be completed on or before 28 February 2025 for Ghana and 31 March 2025 for Tanzania,” said VBL.
Besides, Varun Beverages Morocco SA, a wholly-owned subsidiary of VBL, entered into an exclusive agreement to manufacture and package Cheetos in Morocco.
This is in addition to the existing distribution agreement for PepsiCo’s snacks portfolio consisting of Lays, Cheetos, Doritos in the territory of Morocco, it said.
Moreover, Varun Zimbabwe and Varun Zambia – entered into an Exclusive Snacks Franchising Appointment with Premier Nutrition Trading LLC, Dubai which is a subsidiary of PepsiCo, to manufacture, distribute, and sell “Simba Munchiez” in Zimbabwe & Zambia.
Meanwhile, in a separate filing, VBL said its board in a meeting held on Monday has recommended a final dividend of 50 paise per equity share Rs 2 each for 2024.
Shares of Varun Beverages Ltd. on Monday were trading at Rs 538 apiece on BSE, down 2.89 per cent from the previous close.
(Source: PTI)
