Hindustan Unilever Q3 net hardly moved at Rs955 crore

Hindustan Unilever Ltd, the Indian unit of Anglo-Dutch consumer group Unilever Plc, has reported a net (after-tax) profit of Rs955.32 crore for the quarter ended 31 December 2014, a marginal gain compared to a net profit of Rs954.74 crore for the quarter ended 31 December 2013.

Profit after tax from ordinary activities before exceptional items net of tax and prior period tax adjustments for the quarter stood at Rs955.32 crore against Rs954.74 crore in the year-before quarter, the company said in a release.

Operating profit (profit from operations before other income, finance costs and exceptional items) for the quarter grew 8.3 per cent to Rs1,258.42 crore compared to Rs1,162.38 crore in the previous-year quarter.

HUL said its sales were impacted by weaker than expected growth in urban sales. Net sales grew by 7.7 per cent during the quarter with domestic consumer business growing by 7.6 per cent.

HUL, the maker of products such as Dove soap, Sunsilk shampoo and Lipton tea, said volume sales rose 3 per cent.

''We have delivered another quarter of competitive growth and margin improvement. We continue to strengthen the core of our business and drive the competitiveness of our brands in the market. At the same time, we are leading market development in relatively nascent categories such as packaged foods and premium personal care with strong results. Given the fast changing external environment, we are managing our business dynamically for sustained volume-led growth and margin improvement,'' Harish Manwani, chairman, commented.

Urban sales account for about 60 per cent of HUL's total sales. However, during the December 2014 quarter rural sales were higher compared to urban sales.

HUL, the region's largest consumer goods maker by market capitalisation, has been hurt in the last few quarters by weaker consumer demand in Asia's third-largest economy that grew less than 5 per cent in the past two fiscal years.

The weak volumes are likely to reflect on parent Unilever, which makes more than half of its sales from emerging markets. Unilever is set to announce its results on 20 January.

HUL said it had started bringing down prices of some of its products as it passed on the benefits of lower material costs like oil, in a bid to boost volumes.

Yet, HUL's standalone net profit for the three months to 31 December rose to Rs1,252 crore ($202.85 million) from Rs1,062 crore a year earlier, the company said. During the quarter, there was an exceptional gain of Rs397 crore, it said.