HUL’s net dips 2.2%; strong sales in food, personal care offset by soaps

HUL’s net dips 2.2%; strong sales in food, personal care offset by soaps
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First Published: Mon, Jan 26 2009. 12 25 AM IST
Updated: Mon, Jan 26 2009. 12 25 AM IST
Mumbai: India’s biggest consumer goods maker Hindustan Unilever Ltd met forecasts with a 2.2% dip in quarterly profit, as strong sales in some segments was offset by a slowdown in others.
Unilever, which makes Lux soap, Surf detergent and Lipton tea, said the strong volume growth in personal care products and foods was partly offset by a slowdown in soaps and detergents, due to high input cost-led price growth and volume contraction in detergents.
Soaps and detergents account for the largest portion of its revenues, followed by personal care products.
“Commodity prices are softening, and this augurs well for us, if sustained. We will have to see how this will reflect in running the business,” vice-chairman and chief financial officer D. Sundaram told reporters on a conference call.
Hindustan Unilever, a unit of Anglo-Dutch Unilever Plc. said net profit dipped to Rs616 crore in the quarter to December 2008 from Rs630 crore a year ago, while net sales rose 16.8% to Rs4,310 crore.
Analysts polled by Reuters had on average forecast net profit at Rs610 crore and revenue at Rs4,350 crore.
Of the growth in sales, only about 2.3 percentage points was from volume growth, the rest from price rises, he said.
Operating margin during the quarter was 16.8%, 20 basis points below the year-ago quarter. During the quarter the company was also affected by restructuring costs of Rs40.64 crore, while it booked a gain of Rs8.85 crore on the sale of properties.
Unilever’s shares rose nearly 17% in 2008, while India’s bellwether equity index, the Sensex, lost half its value.
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First Published: Mon, Jan 26 2009. 12 25 AM IST