Hindustan Unilever Q1 net rises 4 percent to Rs 1,059 crore

The operating profit (before exceptionals) came in at R1,431.50 crore, an increase of 14.5% year-on-year with the key personal products portfolio faring well and the company able to rein in costs at R6,673.63, up just around 3% y-o-y. After adjusting for exceptional items, the profit at Rs 1,053 crore was below estimates.

The company’s net sales climbed 5.53 per cent to Rs 7,973.37 crore in the quarter under review as against Rs 7,555 crore a year ago, the company said in a BSE filing. “What we see now is that rural is more or less in line with urban markets”, he added. However, HUL’s standalone net profit (Q-o-Q basis) rose over 4 per cent to Rs 1,059.14 crore during the quarter as against Rs 1,018.08 crore in the same period last fiscal. The company managed to slightly improve its volume growth to 6% during January-June period after posting 4-5% growth in the past two calendar years, helped by price cuts. “Under no circumstances, are we going to lose volume”, said Mehta.

During the quarter, the domestic consumer business grew at five per cent, with six per cent underlying volume growth. “The near-term outlook is largely dependent on the pick-up in rural markets but commodity costs expected to remain benign”, Manwani said. Raw material expenses shrank 2 per cent, with inputs such as palm oil distillates, packaging, crude-oil linked chemicals and so on much lower.

P B Balaji, chief financial officer, HUL, on Tuesday said, “The business environment remains challenging”. Also, input costs were benign resulting in a 3.8 per cent reduction in cost of goods sold.

“The growth in the quarter was impacted by the phasing out of excise duty incentives and price de-growth, as the benefit of lower commodity costs was passed on to consumers”, it said. A healthy volume growth in soaps and detergents was offset by price deflation, while in skin cleansing, the performance was driven by the premium segment. With the overall competitive intensity remaining high across categories, advertising and promotion (A&P) spends were up 2 per cent at Rs.