‘We continue to strengthen our business for the long-term’
Fast moving consumer goods (FMCG) major Hindustan Unilever Ltd. (HUL) on Saturday reported a 13 per cent growth in net profit at Rs.914 crore for the second quarter ended September 30, 2013, as compared to Rs.807 crore in the same period last year.
Total income from operations has risen by 9.2 per cent to Rs. 6,893 crore from Rs. 6,311 crore. .
During the quarter, the company significantly increased advertising and promotion spends to Rs.954 crore from Rs.769 crore. Despite this, the profit before interest and tax (PBIT) grew by 11 per cent with PBIT margin improving 20 basis points.
“We have delivered another quarter of competitive and profitable growth. The consistency and resilience of our performance, in what has been a challenging market environment for some quarters now, is a reflection of the discipline with which we are managing our business and executing our strategy,” Harish Manwani, Chairman, said at a press conference in Mumbai on Saturday.
“We continue to strengthen our business for the long-term by driving innovation, investing behind our brands and further building organisational capabilities,” Mr. Manwani added.
The board of directors of the company has declared an interim dividend of Rs.5.5 per share of the face value Re.1 each for the year ending March 31, 2014.
During the quarter, domestic consumer business grew 10 per cent, ahead of market, driven by 5 per cent underlying volume growth. Soaps and detergents grew by 6 per cent on healthy volume growth, personal products by 12 per cent in a slowing market while beverages grew by 16 per cent backed by strong performance by tea. Packaged foods grew by 9 per cent, the company said.
“The operating context during the quarter was challenging given the volatile cost environment, led by the rupee depreciation, and heightened competitive intensity. Overall industry media spend was up to its highest levels in over 18 quarters, with a particularly sharp increase in oral care. We invested at competitive levels across segments with a significant step-up in personal products — overall advertising and promotion spend was up by Rs.185 crore (+165 basis points) in the quarter,” the company said.
Sanjiv Mehta, MD and CEO, who took over recently, said that he would continue the legacy of his predecessor and would be consistent in his approach to grow the company.