The Hindu : Business : Hindustan Unilever reports Rs. 1,925 crore net profit

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Thursday, Feb 14, 2008
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Business

Hindustan Unilever reports Rs. 1,925 crore net profit

Special Correspondent

Declares Rs. 3 per share final dividend

Exports stood at Rs. 1,342 crore
Home and personal care sales up 12.3 p.c.

— Photo: Paul Noronha

Robust results: Harish Manwani (left), Chairman, with D. Sundaram, Director of Finance & Information Technology, Hindustan Unilever, at a press conference in Mumbai on Wednesday.

MUMBAI: A strong growth in all categories of its portfolio buttressed by cost savings and selective price increases has resulted in Hindustan Unilever Ltd. (HUL) report a higher net profit of Rs. 1,925.47 crore for 2007, a rise of 3.8 per cent. However, the net profit was not strictly comparable as the company had significantly higher exceptional items in 2006 at Rs 315.70 crore against Rs. 156.40 crore in 2007.

The company board has announced a final dividend of Rs. 3 per share, which, along with the interim dividend of Rs. 3 and the Platinum Jubilee dividend of Rs. 3 announced earlier, amounts to a total dividend of Rs. 9 per share of Re. 1 for the year.

Net sales were at Rs. 13,717.75 crore (Rs. 12,103.4 crore), a 13.3 per cent rise. Domestic Fast Moving Consumer Goods (FMCG) – Home and Personal Care (HPC) sales were up 12.3 per cent at Rs. 9,943.57 crore (Rs. 8,851.35 crore).

Foods sales went up by 20.2 per cent to Rs. 2,211.87 crore (Rs. 1,840.83 crore). Exports were up at Rs. 1,342.26 crore (Rs. 1,278.9 crore).

The company reported a gross profit of Rs. 2,322.9 crore (Rs. 1,991.84 crore) and a profit before tax of Rs. 2,184.52 crore (Rs. 1,861.70 crore).

For the fourth quarter ended December 2007, the company reported a 23.5 per cent increase in the net profit at Rs. 631.44 crore (Rs. 511.18 crore) on a higher net sales of Rs. 3,687.40 crore (Rs. 3,156.10 crore).

Cost savings mitigated the impact of escalating costs and combined with selective price increases, increased the gross margin of the company. Profit before interest and tax (PBIT) was up 18.3 per cent and PBIT margin increased by 20 basis points over the corresponding December quarter. This was despite a planned increase of 32 per cent in Advertising & Promotion spend. Harish Manwani, Chairman, HUL, said, “We will continue to strengthen our market leadership in key categories by delivering unmatched consumer value.We recognise the challenge of inflationary pressures and in a competitive context, sustaining cost leadership across the extended supply chain continues to be a key priority.”

The company’s water business is being rolled out and its brand ‘Pure-it’ now reaches around four million consumers in 210 towns across ten States and capacity expansion is on course.

According to D. Sundaram, Director, Finance, HUL, “the cost increases were driven by increase in petroleum prices. Also, vegetable fats, a major input for us, saw an unprecedented rise in prices.”

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