HLL delivers steady numbers

Rex Mathew
23 February 2007

FMCG major Hindustan Lever has reported annual results, which are in line with expectations though the bottom line for the last quarter was below expectations. Better pricing power as compared to the pervious year helped improve margins, but volume growth remains anaemic.

For the year ended December 2006, HLL's standalone net profit has increased 31.76 per cent to Rs1,855.37 crore, or Rs8.41 per share, from Rs1,408.1 crore, or Rs8.05 per share, for the previous year. Net sales increased 9.43 per cent to Rs12,103.39 crore from Rs11,060.55 crore. Other operating income went up to Rs191.46 crore from Rs152.49 crore

Home and personal care sales increased 12.95 per cent during the year while foods sales wet up by 9.05 per cent.

Operating profits, excluding other financial income, went up by 15.27 per cent over the previous year. Operating margins as a percentage of net operating income went up to 14.96 per cent from 14.18 per cent

Cost of inputs increased by 5.53 per cent while advertising and promotion costs were higher by 26.57 per cent. Staff costs went up by 8.71 per cent and other operating expenses increased by 9.62 per cent.

HLL disposed off its tea plantations and merged its subsidiary Vashisti Detergents with itself during the year. Hence the results are not strictly comparable. The company realised Rs36.74 crore from a stake sale in one of its subsidiaries while restructuring of its foods business cost Rs30.88 crore.