In January this year, the cost of Bebzi and Coke products jumped from 100bz a can to 150 bz a can, or 600bz a 6 pack to 850bz a 6 pack.
Now,
Oman Refreshments SAOG have announced their H1 results to the
Muscat Securities Market which has finally allowed me to get some real facts before going off on my tirade against the soft drinks manufacturers for jacking the price of a fizzy pop by 50%. I'm going to get a bit technical and slightly geeky and talk about numbers and stuff, but I have a real point to this so please bear with me.
The Pepsi (bebzi) franchised brand is owned in Oman by
Oman Refreshments SAOG, and they are
listed on the MSM here. Unfortunately, the owners of the Coke franchise are private and so do not report their financials publicly, but one imagines that their margins are similar, but their sales volumes are probably lower. You can
click this link and find Oman Refreshments in the list and download their H1 (Half 1) 2011 earnings on the MSM website.
To save you actually having to do that, here's the facts:
1. In 2010, their profit for the year was RO 3,357,752, up from RO 2,139,332 in 2009 (
source)
2. In the first half of 2011 their profit is RO 2,254,196 on reduced sales volumes from 2010.
Now, back in January, Bebzi and Coke jacked up their prices because of "increasing material prices", yet when you analyze the information, it is apparent that their material/production prices have actually dropped since last year. Here's how I broke it down:
In H1 2010, 9.7 million cases were sold to create a profit of RO 913,227 (approx 94 Baiza profit per case)
In H1 2011, 9.3 million cases were sold to create a profit of RO 2,254,196 (approx 242 Baiza profit per case)
The increase in profits is, even if we take like for like (9.7 million cases in both years) more than a 50% increase, which would be 913,227*1.5 = RO 1,369,840. Yes I know this is a rough calculation and that there are other factors in play such as bottling costs variations and distribution/marketing costs too. My point is though, that their profits have soared, and their overheads have dropped (which was their given reason for jacking the cost of their products up so much).
Add to this the blatant collusion with Coke and you have a situation which in other countries would land them in court. But, of course, nothing like that will happen here. And so my top tip is: Buy shares in Oman Refreshments SAOG - increasing population = more drinks sold = more profits as the margin per unit is so much higher, and ultimately their share value and disbursements will increase. Totally unethical, but might as well take a punt with them if you have a few years to sink some cash in with them. What do you think?
Enjoy the weekend, and perhaps I'll see you tonight at Yolanda Be Cool.
le fin.
