UPDATE: Hindustan Unilever 4Q Net Profit Rises 21%, Beats View
01 Mai 2012 - 2:16PM
Dow Jones News
Hindustan Unilever Ltd. (500696.BY), India's largest consumer
goods maker by sales, Tuesday beat market estimates with a 21% jump
in net profit for the quarter through March amid strong momentum in
sales.
The Unilever PLC (UL) unit has a vast distribution network to
sell its products like the popular Lux soap and Lipton tea to
hundreds of thousands of supermarkets as well as tiny shops across
the subcontinent. Thus, its sales volume trend is widely seen as a
proxy for the strength of local consumer demand.
The Mumbai-based company had seen sales volume growth slow a tad
in the October-December quarter when Indian shoppers, spooked by a
slowdown in the local economy and uncertainty stemming from global
problems such as the euro-zone debt crisis, postponed purchases of
discretionary items like skin creams and deodorants.
Consumers good makers like Hindustan Unilever are also facing
the challenge of guarding their profitability by raising product
prices to pass on high commodity costs without driving away
price-conscious customers amid cut-throat competition.
Local sales volume growth rose in the just-ended quarter to
10.1% from 9.1% in the preceding three months.
"Through the period of last year, when the Indian economy has
been through a difficult ride, consumer demand had remained
resilient," Chief Executive Nitin Paranjpe told reporters.
However, volatility in input costs and intense competition are
expected to continue going ahead, Paranjpe said.
Hindustan Unilever's quarterly net profit rose to INR6.87
billion from INR5.69 billion a year earlier, beating the INR6.47
billion average of estimates in a Dow Jones Newswires poll of 16
analysts.
Overall sales, which includes both domestic and overseas sales,
grew 16% to INR56.60 billion from INR48.94 billion.
Hindustan Unilever has raised prices to offset higher costs of
crude oil-based inputs and the recent move by the federal
government to raise factory-gate taxes.
The price hikes and some cost savings helped Hindustan Unilever
grow its profit margin before interest and tax by 170 basis points
from a year earlier.
Hindustan Unilever's financial performance mirrored the strong
showing of rivals like Godrej Consumer Products Ltd. (532424.BY)
and Dabur India Ltd. (500096.BY), which reported robust sales
Monday.
Personal products sales for the just-ended quarter increased 17%
to INR17.11 billion compared with 14% growth in the December
quarter and 18% in the September quarter.
Sales at its soaps and detergents segment--accounting for 49% of
overall revenue--rose 28% to INR28.34 billion.
-By Rumman Ahmed, Dow Jones Newswires; 91-9845104173;
rumman.ahmed@dowjones.com
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