UN Unilever NV

Hindustan Unilever Ltd. (500696.BY) Monday beat market expectations with a 32% jump in fiscal second-quarter net profit, helped by one-time gains and other non-operating income.

The Indian unit of Unilever PLC (UL) reported also a 14% expansion in sales volume at its local consumer goods business as price cuts earlier this year and stepped up marketing helped it sustain demand for products such as soap bars and detergent packs. It had posted 11% volume growth in each of the previous two quarters.

Net profit in the three months through September rose to INR5.66 billion from INR4.29 billion a year earlier, while sales grew 11% to INR46.81 billion from INR42.28 billion, India's largest consumer goods maker by sales said.

A Dow Jones Newswires poll of 12 analysts on average had forecast the company to post a net profit of INR5.11 billion on sales of INR46.59 billion.

Hindustan Unilever said the latest July-September period included an exceptional gain of INR404.4 million related to sales of properties and long-term trade investments. The year-earlier quarter was hurt by a INR1.35 billion one-time loss, primarily related to restructuring costs at a closed unit.

Also, other income from treasury operations rose 62% from a year earlier to INR768.2 million in the past quarter.

Excluding other income, exceptional items and interest costs, profit from operations fell 2.3% from a year earlier to INR5.92 billion.

Hindustan Unilever's sales have been under pressure as consumers switched to lower-priced offerings from rivals such as Godrej Consumer Products Ltd., ITC Ltd. and the Indian unit of Procter & Gamble Co.

The company cut prices, stepped up advertising and aggressively promoted brands to revive sales. These seem to have helped it sustain double-digit sales volume growth for three consecutive quarters, but hurt its profitability--consumer goods sales rose 9.7% to INR42.78 billion, but overall operating margin contracted 170 basis points.

Though the company had raised prices of some soap and detergent brands in the just-ended quarter, that wasn't enough to offset the increase in raw-material cost as well as higher expenses on advertising, promotion and packaging.

Raw material cost rose 9.3% to INR18.00 billion, while advertising and promotion costs increased 13% to INR6.46 billion.

Shares of the company closed 1.4% up at INR305.65 on the Bombay Stock Exchange, outperforming a 0.7% rise in the benchmark Sensex.

-By Rumman Ahmed, Dow Jones Newswires; 91-9845104173; rumman.ahmed@dowjones.com

Unilever NV (NYSE:UN)
Historical Stock Chart
Von Jun 2024 bis Jul 2024

Unilever NV (NYSE:UN)
Historical Stock Chart
Von Jul 2023 bis Jul 2024