KARACHI, March 21: Pre-tax profit at Reckitt Benckiser Pakistan—the health, household and personal care producer— increased to Rs 144.1 million for the year ended December 31, 2001, from a year ago pretax profit at Rs 19.2 million, which, the company said in a statement, was due to increase in other income, improved operating profits and lower financial expenses.

After tax profit was posted at Rs79.1 million, reflecting increase from Rs12.2 million in 2000. The company declared a dividend of Rs2.50 per share.

Sales of household products reflected growth of 13.9 per cent to Rs1,223.3 million for the year 2001, with most product categories said to be providing good volume growth. Household division incurred an operating loss of Rs65 million during 2001, as against Rs46.7 million loss an year earlier, despite higher sales, which the company attributed to one-time charges of restructuring measures having been undertaken.

Pharmaceutical sales rose 11.6 per cent to Rs1,123.6 million for the latest year, from Rs1,007.2 million in 2000. Apart from benefit through restructuring, significant savings were achieved in cost of inputs. Operating profit in the division rose to Rs185.1 million, from Rs60.9 million in 2000. Pharmaceutical arm must have benefited also from the price increases allowed in some of the products during 2000.

During the year 2001, the company set up its own distribution warehouse in Multan for fulfilment of orders from its distributors in the North. Selling terms were accordingly revised from credit to cash for most of the distributors, which, the company said, had further improved the company’s liquidity position in 2001.

During the fist half of the year, the company had sold its land and building located at C-36, SITE, Karachi. Sale proceeds of those premises and other assets also contributed towards an increase in other income and better cash flows. With the close down of one manufacturing unit in the latter part of 2001, some of the product lines were transferred to the other factory and the remaining products were said to have been out-sourced.

The company identified increase in availability of smuggled goods, under-invoicing in parallel imports, counterfeit products and a sluggish domestic economy, as key challenges facing the business. Also, the pressures for reducing tariff rates on imports of manufactured products were said to pose a threat to the business.