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| HUL net slips 2.7 per cent on MTM hit |
| Bs Reporter / Mumbai Jul 29, 2009, 00:11 IST |
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Hindustan Unilever Ltd (HUL), India’s largest fast-moving consumer goods company, today reported a 2.7 per cent dip in net profit for the first quarter of this financial year, knocking its shares down from a nine-year high touched earlier in the session.
The profit, which fell to Rs 543 crore from Rs 558 crore a year ago, was mainly hit by a mark-to-market charge of Rs 31 crore from a restatement of foreign exchange exposure.
The company’s operating margin widened to 15 per cent in the quarter from 14.4 per cent a year earlier, on lower prices of raw materials. “We have also taken decisive actions to strengthen our competitiveness and execution capabilities in the marketplace.
 These have started to show positive results, with good volume recovery in personal products and foods,” said Harish Manwani, chairman.
Total income increased 7.8 per cent to Rs 4,475.7 crore during the quarter, as against Rs 4,152.8 crore recorded during the same period last year.
Sales saw a growth of 12.5 per cent to Rs 4,148.7 crore, as against Rs 3,677.9 crore during the first quarter last year. Of this 12.5 per cent, value growth was 10 per cent and volume growth was 2 per cent. Compared to the last quarter, the volume growth is up by 6 per cent, as the company had seen a dip of 4 per cent in the January to March 2009 quarter.
During the quarter, the company relaunched products like Lifebuoy and Liril, while they cut prices in mass segment products like Breeze. New launches and higher media investments drove advertising and promotion spending up by 26 per cent.
“Some of these actions are already showing results in the personal care, hair and oralcare categories. For instance, the sales of Sunsilk, Dove and Clinic All Clear grew. Breeze, too, regained market share and volumes,” said R Sridhar, chief financial officer, while admitting the company continues to witness downtrading in laundry and tea, as customers looked for good value at lower prices.
HLL’s shares, which rose to Rs 306 in intra-day trades, fell to a low of Rs 273.40 before closing at Rs 277. The stock has risen 10.7 per cent so far this year, lagging a 59 per cent rise in the main index.
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