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| HUL net grows first time in 3 qtrs |
| BS Reporter / New Delhi Jan 27, 2010, 00:39 IST |
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Sees 5.5% rise to Rs 649 crore on robust sales of skin creams.
The severe, extended winter in large parts of the country has warmed the hearts at Hindustan Unilever as the company posted its first profit growth in three quarters for October-December 2009, its path smoothed by robust sales of skin creams.
The country’s biggest maker of household products, announcing its quarterly results today as the country celebrated the Republic Day, reported a 5.5 per cent rise in net profit to Rs 649 crore from Rs 615 crore in the same quarter of 2008.
 That is a shade lower than the Rs 661 crore average forecast of 17 analysts compiled by Bloomberg News. Net sales stood at Rs 4,504 crore, a rise of 4.5 per cent.
“We are seeing good results from the actions that we have taken to drive growth. Volume growth accelerated in the quarter, backed by quality innovations, increased brand support and continued focus on market execution. We are committed to strengthening our market leadership and will invest appropriately in an increasingly competitive environment,” Chairman Harish Manwani said in a statement.
Sales of Pond’s and Fair & Lovely creams, which account for almost half of the company’s pre-tax profit, rose as consumers, armed with more money to spare because of the growing economy, sought to pamper their cracking skin. Overall, the momentum in personal products was sustained ,with 16 per cent growth led by hair care and skin care brands. Dove, the company said, had become the number one hair care brand in modern trade.
The foods business grew at 9 per cent, as all three segments — beverages, processed foods and ice cream — saw higher sales. Coffee growth was largely driven by small packs.
The company said gross margins were at healthy levels, as higher cost savings and buying efficiencies drove the cost of goods sold down 480 basis points (one basis points equals one-hundredth of a percentage point). The underlying operating profit grew 5 per cent and operating margin, excluding the mark-to-market accounting impact on foreign exchange exposures, improved 10 basis points to 16.8 per cent, despite a 530-basis-point increase in brand investments.
A fall in commodity prices helped to keep costs in check. The margins also received help from cost-saving programmes. The company said it would drive cost efficiencies even harder in 2010.
According to the company, 75 per cent of its portfolio saw robust growth. The laundry business stood out for its surge in volume. In value terms, however, the growth of the laundry business was kept on a leash by price reductions.
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