HLL bottom line declines 11.3%

CORPORATE SCORECARD

Hindustan Lever (HLL), the country's largest fast moving consumer goods company, today announced a net profit of Rs 392.89 crore for the quarter ended March31, 2007, a decline of 11.3 per cent compared with Rs 442.86 crore in the corresponding quarter last year.

The figures are not strictly comparable as the March quarter in 2006 includes an exceptional income of Rs 148.88 crore on account of sale of the Nihar business. The quarter under consideration also takes into account exceptional items of Rs 59.03 crore on account of the reduction in tax liability following the amalgamation of Modern Foods as well as the transfer of factory units to subsidiaries.

Profit after tax for the quarter under review was Rs 333.86 crore, 13.56 per cent higher compared with Rs 293.98 crore for the corresponding quarter in 2006. Net sales for the quarter stood at Rs 3,184.32 crore, 13.80 per cent higher compared with Rs 2,798.05 crore in the year-ago period.

After adjusting for the additional sales from Modern Foods, the net sales for the quarter were Rs 3,164.53 crore, higher by 13.09 per cent.

The domestic FMCG business grew by 12.3 per cent during the quarter, with home and personal care growing at 10 per cent and foods at 23 per cent.

Advertising and promotion costs for the quarter were significantly higher by 17.5 per cent at Rs 356.37 crore or 12.4 per cent of the total FMCG sales. D Sundaram, director, finance and IT, HLL, said about one-third of the growth had been due to underlying volume growth. The growth was broadbased over urban and rural markets, with the urban market contributing about 55 per cent to the total growth during the quarter.

HLL Chairman Harish Manwani said, "We have sustained growth momentum in the key competitive categories of laundry and shampoos. All the foods categories have performed strongly. The all-round growth has been driven by our strengthened competitiveness in the urban markets and sustained market development in the rural areas. Inflationary pressures remain a cause for concern, but we continue to steer aggressive cost-effectiveness programmes, manage judicious price increases and drive for an improved portfolio mix."

Our strategic priority remains unchanged. We will continue to leverage our focussed portfolio of powerful brands to strengthen leadership in our core categories."