Bottlers Nepal (Balaju) Q4 Results: Revenue Slips and Heavy Losses Despite Strong Brand Premium

Bottlers Nepal (Balaju) Ltd. (BNL), one of the key Coca-Cola bottling units in Nepal, has published its audited Q4 financial results for FY 2024/25, revealing revenue contraction, mounting losses, and declining profitability, even as its stock continues to trade at a significant premium.

The company reported a total revenue of Rs. 10.96 billion in Q4, down 4.54% year-on-year compared to Rs. 11.25 billion in Q4 of FY 2023/24. Sequentially, revenue showed mild growth over Q3 (Rs. 7.10 billion) but remains below past levels, reflecting demand challenges and cost-side pressures.

The gross profit stood at Rs. 2.73 billion, with a gross margin of 24.88%, slightly weaker than last year’s 26.12%. Margins fluctuated during the year, peaking at 26.66% in Q1, before slipping as raw material and operating costs weighed on performance.

BNL’s net earnings turned sharply negative. The company posted a net loss of Rs. 400.60 million in Q4, compared to a profit of Rs. 395.86 million in Q4 of last year. This marks a reversal from the small profit of Rs. 15.98 million in Q3 and the Rs. 84.38 million profit in Q1. The net margin collapsed to -3.65%, from +3.52% in the same quarter last year.

Return ratios turned negative as well. Return on Assets (ROA) stood at -2.76%, compared to +2.67% last year, while Return on Equity (ROE) dropped to -6.16%, compared to +6.29% in Q4 last year.

Per-share earnings weakened considerably. EPS (annualized) slumped to -Rs. 205.55, compared to +Rs. 203.12 in Q4 of last year and Rs. 10.93 in Q3. The reported PE ratio stood at -85.13, reflecting the company’s loss-making performance.

Despite weak fundamentals, investor sentiment remains strong. The book value per share stood at Rs. 3,184.34, while the market value per share traded at Rs. 17,498.00, more than 5.5x book value, reflecting confidence in Coca-Cola’s dominant market brand and long-term growth potential in Nepal’s beverage sector.

Dividend for FY 2024/25 has not been declared yet. Last year, BNL did not announce any payout amid rising operational challenges.