HUL net profit down 2% to Rs 616 cr in Q3
The economic slowdown has left its wounds on consumer goods giant Hindustan Unilever Ltd, whose net profit was squeezed in the October-December 2008 quarter compared with the year-ago period.business Updated: Jan 25, 2009 20:32 IST
The economic slowdown has left its wounds on consumer goods giant Hindustan Unilever Ltd, whose net profit was squeezed in the October-December 2008 quarter compared with the year-ago period.
HUL said net profit dipped to Rs 616 crore in the quarter from Rs 630 crore a year ago, down more than 2 per cent, while net sales rose 16.8 per cent to Rs 4,310 crore, helped by price increases.
Losses in processed foods and ice creams ate into the performance led by its mainstay soaps and detergents as well as beverages, both of which grew by about 24 per cent in revenues. But higher detergent revenues came from increased prices, while volumes shrunk.
“The processed foods category, which includes brands like Knorr, Kissan, Annapurna and Amaze, attracted considerable marketing and ad spends, which led to the losses,” Chief Financial Officer D Sundaram said.
Net sales grew by 16.8 per cent overall, with core fast moving consumer goods (FMCG) sales growing 21 per cent. Exports fell 23 per cent to Rs 267 crore, hitting the company hard.
HUL's growth in the soaps and detergents category came from price increases but a slowdown in volumes is a matter of concern for the company.
Its position in beverages is also getting weak. Although it still continues to maintain value leadership, competitor Tata Tea is the leader in volume terms.
Expenditure went up to Rs 3,655.22 crore for the quarter ended December 31, 2008, against Rs 3,161.1 crore in the same quarter previous fiscal.
Consumption of raw or packaging materials went up to Rs 1,689.85 crore vis-a-vis Rs 1,359.57 crore for the quarter ended December 31, 2007.