First-half profits at Oman Refreshments Company have jumped by 147 per cent after the company made the decision in mid-January to hike the price of its soft drinks by 50 per cent.
Releasing its figures to the Muscat Securities Market (MSM), the company revealed that despite a four per cent drop in first-half sales volumes, from 9.7mn cases to 9.3mn in 2011, net profits have grown from RO913,227 for the first half of 2010 to RO2.25mn in 2011.
Total revenue also grew 16 per cent, from RO22mn in the first half of 2010 to RO25.5mn for the corresponding period in 2011.
Joice Mathew, senior manager of research at United Securities, said a key reason for the growth in profits was increase in the price of its soft drinks from 100bz to 150bz in January - but added that rising packaging costs could impact further growth. "Some raw material prices have increased. We hope the company can continue with its performance, but it will be a challenging environment with an increase in plastic and packaging prices.
"But Ramadan is coming up, when generally segments like PET-bottled products turn fast-moving items and sales of canned products like Pepsi drop. So there is some seasonality to the sales," Mathew added.
Anil Kumar, senior vice president of research at Fincorp, added that the rise in profits can also be put down to the fall in sugar prices. "I think the twin advantages of higher sales prices and lower commodity prices have played a big role in boosting profits."
© Muscat Daily 2011
