Wednesday, Oct 19, 2011
Gulf News
Dubai: A price hike on soft drinks implemented earlier this year has helped Dubai Refreshments Company post another strong quarterly performance.
The drinks firm, which is the sole franchisee and distributor of PepsiCo products in Dubai, Sharjah, Ajman, Umm Al Quwain, Fujairah and Ras Al Khaimah, reported yesterday it has made a Dh30.7 million net profit in the three months to September, up 91 per cent from the year-before period.
In January, the Ministry of Economy announced that soft drink prices were to rise 50 per cent. Along with its major competitor Coca-Cola, Dubai Refreshments Company increased the price of a can of Pepsi from Dh1 to Dh1.50 citing the rising cost of commodities such as tin, sugar and plastic.
In spite of the pressure on sales due to a turbulent economic environment, we managed to achieve an increase in revenue and profits by improvement in sales realisation, optimising the total cost, implementing cost control programmes and exploring new export opportunities, Dubai Refreshments Company said in a statement to Dubais bourse.
Revenue for the third quarter increased 34 per cent to Dh268 million. The operating profit for the same period rose by 105 per cent to Dh30.9 million compared to Dh15.1 million in the corresponding period last year. Net profit for the nine months to September stood at Dh92.2 million, a 104 per cent increase over 2010.
Raw material costs
In the second half of 2010, sugar prices doubled, leading gains in the period among 19 raw materials in the Thomson Reuters/Jefferies CRB Index. As a result, local companies decided they had to raise prices in order to compensate for heavy operating losses. The price of sugar has also continued to rise throughout 2011.
Sugar prices increased by 40 per cent from mid-April to late July this year, said Pradeep Unni, vice-president of Richcomm Global Services at Dubai Multi Commodities Centre.
By Kevin Scott, Staff Reporter
Gulf News 2011. All rights reserved.
