HUL posts 33.95% growth in net profit at Rs 546.61 crore
Strong volume and price growth across segments and markets saw FMCG firm Hindustan Unilever (HUL) post 33.95 per cent growth in net profit at Rs 546.61 crore for the third quarter ended September 2008, as compared to Rs 408.06 crore in the corresponding quarter last year. Despite the volatility in the markets, the company reported net sales of Rs 4,027.87 crore compared to Rs 3,364.63 crore, a growth of 20 per cent.
The company recorded a volume growth of 6.8 per cent and price growth at 14.8 per cent. D Sundaram, vice-chairman and chief financial officer, HUL, said, “We are seeing growth across the rural and urban markets with the urban markets marginally higher by 2-3 per cent. Also, our categories have grown, although the soaps and detergents category did bear the brunt of the high costs in oil and fats.”
In the individual segments, soaps and detergents business grew at 26 per cent, processed foods at 34 per cent, personal products at 17 per cent, ice creams at 25 per cent, and beverages at 12 per cent. However the company’s exports recorded a marginal dip at 6 per cent. “The dip in the exports was on account of we phasing out some of our speciality products and bulk products that were blocking our capital. In the long term, we will remain largely focused on FMCG exports,”said Sundaram.
With the markets bracing up for tough times as the BSE closed at 8700, HUL maintained that it would be on track with its earlier growth and expansion plans. For the June to September quarter, the company invested Rs 404.32 crore (10 per cent of revenues) on advertising and promotions.
“The company will continue to invest in brand development and advertising, and building the infrastructure to grow our products portfolio. Some of these costs are inbuilt into our P&L account,” said Sundaram. “Even our hiring and incentives plan are as per our projections,” he shared.
Speaking of the softening commodity prices and a possible revision of prices, Sundaram said, “Our prices are competitive and we would like to maintain that now.” He, however added, “The depreciation of the rupee against the US dollar makes imports expensive for us as we import globally.”
As the rupee continues its depreciation against the dollar, Sundaram maintained, “HUL does not hedge and practise forward buying from our suppliers.” Shares of the company today fell by 7.56 per cent and settled at Rs 224.90 on the BSE.