Karachi February 23 2022: The year ahead is going to be a challenging one to protect market share amid fierce competition stated by Colgate-Palmolive in its recent filling at exchange.
Colgate Palmolive expects margins to remain under pressure due to rising input costs. High inflation is expected to reduce purchasing power of consumers and keep their spending in check. The economic outlook is also expected to be subdued due to recent surge in COVID-19 cases.
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Colgate built upon its objective of increasing toothpaste consumption via focused drives especially in areas with low penetration of toothpastes.
Personal care category continued to grow with improving share of shelf in store and visible distribution. Shampoo penetration increased through the introduction of various trial packs and increased focus on distribution in smaller towns.
High level of advertising and trade level spending was witnessed in the laundry category. The unorganized sector continues to pose a serious challenge to growth especially in the laundry and dish care business.
During 1HFY22, the growth momentum continued as the Company registered 17.07% increase in net turnover. However, increase in input costs including commodities and currency depreciation resulted in a decrease in gross margin by 301 bps from 30.09% to 27.08%.
Amid increasing uncertainty surrounding raw material availability and rising commodity prices, the Company increased its inventory levels to Rs 9,957 million as compared to Rs 7,252 million on June 30, 2021.
Selling and distribution costs went up by 4.78% mainly due to freight charges. Administrative expenses grew by 13.27% primarily due to employee related costs.