HLL Q3 adjusted net rises 17.72 per cent as margins improve

Rex Mathew
01 November 2006

For the quarter ended 30 September 2006, HLL has reported a net profit of Rs520.74 crore, or Rs2.36 per share, an increase of 59.76 per cent over Rs325.96 crore, or Rs1.48 per share, for the previous year quarter. Net operating revenues increased 12.25 per cent to Rs3,066.01 crore from Rs2,731.54 crore a year ago.

The company booked exceptional income of Rs137.74 crore during the quarter — including profit from sale of investments and reversal of earlier provisions adjusted by current write-offs and provisions. Adjusted for these one-time incomes, net profits for the quarter have increased 17.72 per cent to Rs383 crore from Rs325.35 crore a year ago.

HLL had recently merged its subsidiaries — International Fisheries, Lipton India Exports, Merryweather Food Products, TOC Disinfectants and Lever India Exports with the Company besides amalgamating Vashisti Detergents. Doom Dooma and TEI plantation Divisions were de-merged and disposed off. Hence, the results for the quarter are not strictly comparable to those of the previous year quarter.

For the previous quarter ended 30 June 2006, HLL has reported a net profit of Rs380.59 crore on revenues of Rs3,083.23 crore.

Operating profits, or EBITDA - excluding other income, increased 17 per cent to Rs402.88 crore from Rs344.37 crore. Operating margins as a percentage of net revenues improved to 13.14 per cent from 12.61 per cent a year ago. Sequentially, operating margins have declined from 13.45 per cent achieved for the previous quarter.

The improvement in operating margins was mostly on account of lower growth of 7.35 per cent in input costs. Advertisement and marketing expenses jumped 41.46 per cent while staff costs went up modestly by 2.86 per cent. Other operating expenses increased 13.02 per cent over the previous year quarter.