Hindustan Unilever Ltd's December quarter net profit fell nearly 2.5 per cent after it wrote down the value of investments and loans to a subsidiary. While the overall profits were on sustainable level the net profit has shown a dip due to the extraordinary expenses that have been accounted for in this quarter
The company wrote down Rs165 crore in the quarter on the value of advances to a unit and a decline in the value of its investments. Gains from the sale of properties also fell 88 per cent from a year earlier to Rs88 crore in the quarter.
Exceptional items include profit on sale of properties Rs88.5 crore, which was valued at Rs758.2 crore earlier, gain / charge on account of changes in actuarial assumptions in valuation of long term employee benefits, restructuring costs (including amount payable in an industrial dispute principally for a closed undertaking) of Rs406.4 crore.
Net sales of the company during the quarter went up to Rs4,307.71 crore from Rs3,687.4 crore a year ago.
Input cost inflation has started receding and if sustained, will reflect in lower consuming cost. However, impact of high input cost inflation continued in this quarter.
Year -to-date investment behind brands continues at 10.1 per cent of turnover, growing at 16 per cent. Spends during the quarter remain competitive, although marginally lower by 1.3 per cent over same period last year.
In a difficult economic environment, PBIT grew 15.1 per cent and PAT grew 12.7 per cent. PBIT margin for the quarter at 16.8 per cent of sales, was 0.20 per cent below December quarter 2007.
Profit after tax (PAT) from ordinary activities, after accounting for exceptional items grew 1 per cent, due to higher base effect.
Harish Manwani, chairman commented, "We continue to deliver strong top line and operating profit growth. Softening commodity prices augur well for the business as we sustain our focus on delivering superior consumer value. In the current economic scenario, market development and consumer spending are being monitored closely to manage the business dynamically. We remain determined to leverage our strong portfolio and scale to deliver competitive and profitable growth."
The board of directors has approved a change in the accounting year of the company to commence from 1 April of every year and to end on 31March of the following year.
Consequently, as a transitionary arrangement, the next annual accounts and report of the company will be for a period of 15 months commencing 1 January 2008 and ending 31 March 2009.