The Hindu : Business : HUL’s improved showing

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Saturday, Jul 26, 2008
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HUL’s improved showing

Special Correspondent

Declares an interim dividend of Rs. 3.50 per share

— PHOTO: PAUL NORONHA

SUSTAINING GROWTH MOMENTUM: Harish Manwani (left), Chairman, Hindustan Unilever, with Nitin Paranjpe, CEO, addressing a press conference in Mumbai on Friday.

MUMBAI: A focused action on cost management, improved portfolio mix and judicious pricing has helped Hindustan Unilever Ltd. (HUL), the fast moving consumer goods (FMCG) giant, mitigate the steep cost inflation and report a growth of 13 per cent in its net profit at Rs. 558.18 crore (Rs. 493.08 crore) for the second quarter of the current financial year. In a scenario where cost pressures were intense, the company reported net sales of Rs. 4,215.67 crore (Rs. 3,481.4 crore), a growth of 21 per cent.

The board has declared an interim dividend of Rs. 3.50 per share for extended 15 months accounting year ending March 31, 2009.

Harish Manwani, Chairman, HUL, said, “building on the strong start to the year, we have sustained the growth momentum in this quarter. In the context of high cost inflation, the business is being managed dynamically using all available levers — cost management, enhanced mix and judicious pricing.” For the quarter, the company’s FMCG business grew by 18.8 per cent.

D. Sundaram, Finance Director, HUL, said the second quarter was one of the company’s ‘better’ quarters. The FMCG business growth constituted an underlying volume growth of 8.3 per cent and an underlying price growth of 9.7 per cent.

While the home & personal care (HPC) business grew at 20 per cent with growth across categories with the personal wash growth being driven both by volume and price. The foods business grew by 14 per cent with good underlying volume growth seen in beverages, processed foods and ice-cream.

HUL’s water business through its brand, Pureit, has now gone national having been extended to 364 towns across 20 states. The company’s sale of Pureit has crossed the one-million unit mark.

HUL’s investment behind brands and new categories continued during the quarter and grew by 30.5 per cent. The profit before interest and tax grew 20.7 per cent, while the profit before interest and tax margin for the quarter at 14.2 per cent of sales was maintained at the same level as the June 2007 quarter.

On cost savings, Mr. Sundaram said, “in the coming quarters, we have to watch cost escalation with the bulk of it coming from petroleum price movement. We have a codified system within the company for cost savings. We are always looking at opportunities and areas to drive cost savings, for example, we keep increasing freight movement through rail rather than road and also are continuously pushing energy savings.”

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