Nestle India stews in Maggi soup, reports Rs 64 crore loss
Fast-moving consumer goods (FMCG) major Nestle India on Wednesday reported a loss during the April-June quarter as sales took a hit after its popular Maggi noodles were withdrawn from the market over safety concerns.
The company reported a net loss of Rs 64.4 crore in its second quarter compared with a net profit of Rs 288 crore a year ago.
Total income from operations fell close to 20% year-on-year to Rs 1,957 crore during the quarter.
“Results for the quarter have been impacted by the Maggi noodle issue,” Nestle India said.
Nestle has been at the centre of the country’s worst food scare in a decade after food regulators in various states reported that Maggi noddle packs contained high levels of lead and MSG (monosodium glutamate). While the company subsequently removed the entire stock from the markets, it maintains that the products are safe.
In the quarter under review, net sales worth Rs 288 crore were reversed in relation to the Maggi noodles stock being withdrawn from trade partners and market, the company said.
Nestle India said it booked an exceptional charge of Rs 451.7 crore in the quarter “relating to estimates of loss on account of stocks withdrawn, including incidental costs thereto and other related costs incurred exclusively in the ordinary course of the business”.
While the Maggi issue dragged down domestic sales by 20%, overseas sales fell close to 13% due to lower coffee exports to Russia, Nestle India said.
“Nestle India is making all efforts and will continue to engage with authorities to bring Maggi noodles back on the shelves,” Suresh Narayanan, due to take over as the company’s India MD in August, said.
Nestle India shares closed down 0.6% on the BSE on Wednesday.