Unilever Q3 Profit Up 5%

I gritted myself for something rather unpleasant and its turned out very well, said David Lang, an analyst at Henderson Crosthwaite.

The shares jumped 42-1/2p in early London trade to 1,317-1/2p after profits rose to 826 million ($1.36 billion) for the quarter. The results beat analysts forecasts which ranged from 760 million to 820 million.

I think there is quite a lot of momentum in Unilever and that is before the benefits of management reorganisation which began in September, said Lang.

Before an exceptional charge of 32 million, mostly to reshape its newly acquired industrial cleaning business Diversey, pretax profits rose six per cent to 918 million.

 

The total charges were clearly lower than we expected, said Richard Newboult, an analyst at Lehman Brothers who forecast a total restructuring charge of 74 million with about half of that related to Diversey.

Diversey, acquired in January from Canadian brewer Molson for 360 million, was merged with Lever Industrial in October to form a combined business with annual turnover of 1.15 billion and a workforce of 13,000 in 60 countries. Unilever owns a range of household brands including washing detergent OMO, Brooke Bond tea, Ponds cosmetic cream and several ice-cream products.

Although poor weather had a negative effect on icecream sales, other parts of the business in Europe did well, said Unilever press officer Mike Haines.

Analysts and stockmarket dealers agreed. Despite the impact of a dull summer on ice-cream sales and profits, Unilever still managed to improve its profit by 13 million to 502 million in the three month period from improved profits in detergents, frozen foods and personal products.

The real strength came from the emerging markets of Latin America and Asia Pacific and the strong underlying performance in North America, added Haines.

The Asia-Pacific region turned in a 20 million increase in profits to 108 million in the third quarter, Latin America was up 14 million at 79 million, while Africa and the Middle East showed a nine million rise to 56 million, reflecting changes made by the group to its Nigerian business.