One-time exceptional gains from sale of property and reduction in provision for retirement benefits helped Hindustan Unilever Ltd. (HUL) to report a net profit of Rs.872 crore for the fourth quarter ended March 31, 2014, an increase of 11 per cent as compared to Rs.787 crore in the year ago period. Profit after tax, before exceptional items, grew by 7 per cent to Rs.832 crore.
The company reported a sales revenue of Rs.7,094 crore as compared to Rs.6,466 crore.
“The operating context during the quarter remained challenging with slowing market growth and high competitive intensity. Firm input costs were managed through a mix of judicious pricing and cost savings. Brand investments were sustained at competitive levels with higher advertising spend being offset by lower promotional activities,” the company said.
During the quarter, domestic consumer business grew at 9 per cent, ahead of market, with 3 per cent underlying volume growth, it added.
For the year ended March 31, 2014, the company reported a 2 per cent growth in net profit at Rs.3,867 crore against Rs.3,797 crore. Net profit growth was impacted by the significant property sale in the previous year, the company said.
Profit after tax but before exceptional items, grew by 7 per cent to Rs.3,555 crore. Cash generated from operations at over Rs.5,000 crore for the year, was up Rs.462 crore over the previous year.
During the year, the company’s domestic consumer business grew by 9 per cent with 4 per cent underlying volume growth, ahead of market.
The company’s board has proposed a final dividend of Rs.7.5 per share for the year. Together with the interim dividend of Rs.5.5 per share, the total dividend for the year amounts to Rs.13 per share.
“Against the backdrop of a challenging environment, we have delivered another year of competitive and profitable growth. We stepped up investment behind our brands and innovations, whilst driving cost savings and operational efficiencies with even greater rigor. Looking ahead, we are confident that our strategy is on track to deliver sustainable long term growth and margin improvement,” Harish Manwani, Chairman, said.
“We believe the key challenges for HUL will be the volume growth,” said Rahul Shah, Vice-President, Equity Advisory Group, Motilal Oswal Securities. HUL shares closed with a loss of 0,02 per cent at Rs.580.60 on the BSE on Monday.
