Hurt by higher raw material costs and increased advertising spend, FMCG major Hindustan
Unilever today reported a 1.83% decline in net profit to Rs 533.21 crore for the quarter ended June, 2010.
The company had posted a net profit of Rs 543.18 crore in the corresponding period a year ago.
Net sales from operations during the period under review stood at Rs 4,793.89 crore, as against Rs 4,475.68 crore in
the same quarter last fiscal, up 7.1%, the company said.
During the quarter, the cost of raw materials and packaging materials increased by 7.81% to Rs 1,683.26
crore from Rs 1,561.31 crore in the year ago period.
Advertising and promotion costs increased to Rs 751.21 crore during the quarter from Rs 561.11 crore a year ago, an increase of 33.87%.
Commenting on the results, HUL Chairman Harish Manwani said: "Despite an intensely competitive environment, we have sustained double digits volume growth. We continue to invest fully to defend our strong leadership position and build competitive growth momentum through bigger and better innovations."
The company said it witnessed an 11% growth in the personal products segment to Rs 1,365.51 crore during the
quarter, while soaps and detergents earnings were up 2.39% at Rs 2,264.46 crore.
The company also said it has sold a 43.31% stake in Hindustan Field Services (HFS) a joint venture with Smollan Holdings to the partner.
The JV was formed in November, 2007, to build capabilities for in store execution of modern retail projects.
Although HUL will continue to hold a 7.69% stake in HFS, the erstwhile JV will now cease to be a subsidiary of
the company, it added.