Special Correspondent

Cost effective measures help

Achieves growth across all categories

Plans capital expenditure

of Rs. 500 crore

MUMBAI: Hindustan Unilever Ltd. (HUL) has reported a growth of 16.5 per cent in the net profit at Rs. 380.95 crore for the first quarter of the year 2008 against Rs. 327.08 crore (before exceptional items) in the corresponding period last year. Net sales were up 19.1 per cent at Rs. 3,793.94 crore (Rs. 3,184.32 crore).

In the March 2007 quarter, the company had a gain of Rs. 65.8 crore arising from a tax credit off-setting losses of Modern Foods and a transfer of assets to a subsidiary.

The company’s aggressive cost effective measures mitigated the impact of escalating costs.

Addressing the media, D. Sundaram, Vice-Chairman, HUL said, “there has been growth across all categories and brands with an underlying volume growth of 10.2 per cent. Our cost saving measures and better product mix reflects in better ratios and buying efficiencies of raw materials. We will face whatever cost challenges and manage margins by judicial price increases if necessary. While inflation is a cause for concern, AC Nielsen figures indicate that there has been slowdown in market growth.”

The company’s capex plans across all categories and products for the current year are in the region of Rs. 500 crore. The home and personal care (HPC) business grew 20.4 per cent to Rs. 2,711.72 crore with strong growth across all categories.

The foods business grew 15.1 per cent to Rs. 611.24 crore. During the quarter, the company’s ‘Amaze’ was launched in Karnataka and Tamil Nadu. The company’s water business has been extended to 170 key towns across 19 states with a good response.

In a statement, Harish Manwani, Chairman, HUL, said, “we continue to sustain the growth momentum with a strong start to the year. Inflationary pressures are a cause for concern, but market growth continues to be strong and there is no evidence as yet of any significant impact on consumer spending in our FMCG categories.”

The directors of HUL have approved a change in the accounting year from April 1 to March 31. As a consequence, the next annual accounts will be for a period of 15 months commencing January 1, 2008 and ending on March 31, 2009.