Hindustan Unilever Ltd. (HUL) on Monday reported a growth of 32 per cent in its net profit at Rs.566 crore for the quarter ended September 30, 2010, against Rs.428.50 crore in the corresponding period in the previous year. Net sales were up 11 per cent at Rs.4,681 crore (Rs.4,228.1 crore) driven by strong underlying volume growth of 14 per cent in the domestic consumer business. The growth was broad based across home and personal care (HPC) as well as foods.
The board of directors has declared an interim dividend of Rs.3 per share.
The HPC business grew 9 per cent with growth across the portfolio while personal products grew by 15 per cent. The foods business grew 13 per cent driven by beverages and ice cream growing 9 per cent and processed foods by 26 per cent.
In spite of a significant rise in input costs, the increase in the cost of goods sold was contained at 20 basis points through buying efficiencies and cost savings programmes.
The competitive level of advertising along with investment to drive emerging categories led to a 90-basis-point increase in advertising spends.
The advertising and promotion (A&P) increased by 30 basis points to 13.8 per cent of sales. The increase in the cost of goods sold, higher investment in A&P and higher cost of packaging moulds to support the step up in innovation activity led to a 170-basis-point decline in operating margin. The gross profit declined by 2.3 per cent to Rs.591.50 crore (Rs.605.70 crore). The improved cash flow and effective treasury management resulted in financial income increasing by Rs.30 crore and consequently the profit after tax before exceptional items went up by 6.8 per cent. Exceptional gains of Rs.40 crore compared to exceptional costs of Rs.135 crore in the previous year led to a 32 per cent growth in the net profit.
Company Chairman Harish Manwani said “our domestic consumer business has delivered double-digit underlying volume growth for the third quarter in a row. This has been led by bigger and better innovations supported by strong execution in the market. We continue to strengthen our core business while at the same time leading market development in emerging categories.''