Fast moving consumer goods (FMCG) major Hindustan Unilever Limited (HUL) on Monday reported a 4.7 per cent increase in its net profit at Rs.2,306 crore for 2010-11. The board of directors of the company has proposed a final dividend of Rs.3.50 for the year, subject to approval of the shareholders at the annual general meeting. Together with interim dividend of Rs.3, the total dividend for the year amounts to Rs.6.50.
While the domestic consumer business grew by 11 per cent, driven by a strong 13 per cent volume growth, the profit before interest and tax margins declined by 190 basis points on account of higher input cost inflation and 60 basis points increase in brand investment.
Company Chairman Harish Manwani said: “Our performance has been strong and consistent through the year, driven by our strategy of growing the core and leading market development of the segments and categories of the future. Input costs remain high with the added challenge of volatility, while the competitive environment has further intensified. In this context, we will continue to focus on the best value for our consumers and customers through innovations and strong cost efficiency programmes. The business is being managed even more dynamically to deliver long-term competitive, profitable and sustainable growth.
The company reported a marginal 2 per cent drop in its net profit at Rs.569 crore for the fourth quarter of 2010-11 compared to the same period last year, largely due to extraordinary income during the year-ago period. The net profit before exceptional items, however, was up 22 per cent at Rs.515 crore.
Net sales jumped by 13.5 per cent to Rs.4,899 crore from Rs.4,315 crore while the exceptional gain for the quarter was Rs.84 crore as against Rs.143 crore. Input cost inflation continued to remain high and volatile driven by crude and palm oil and cost of goods sold went up by 290 basis points. Buying efficiencies and cost saving programme remain a priority and are being further scaled up. Advertising and promotion spends, at Rs.623 crore, remained competitive at 12.7 per cent of sales, with increased brand investment in personal products and foods.
The profit before interest and tax grew by 8.4 per cent with the margin on profit before interest and tax lower by 60 basis points on account of input cost inflation.
During the quarter, the domestic consumer and the FMCG business grew by 14 per cent, with strong performance across home and personal care and foods segments. Personal products continued its strong momentum with 16.2 per cent growth during the quarter. The foods business grew by 15.4 per cent across categories.