The Hindu Business Line : HLL first-quarter net declines 11.3%

Performance slab
Domestic FMCG business grew at 12.3%
Demand stable despite selective price hike in different categories.
Merger with Modern Foods gives about 5% to food business margins.

Mumbai April 30 Inflationary pressures continue to be a concern for Hindustan Lever Limited (HLL). But the company looks to steer growth through a mix of pricing possibilities and an enhanced product mix, said Mr D. Sundaram, HLL's Director-Finance and IT.

The FMCG (fast moving consumer goods) company posted a net profit of Rs 392.89 crore for the first quarter ended March 31, 2007, as compared to Rs 442.86 in the corresponding period of the previous year.

The net profit for the quarter under review saw a 11.3 per cent decline, compared against the corresponding quarter. But, Mr Sundaram said, the quarterly performances were not comparable due to the exceptional income component — the profit on disposal of oil brand Nihar, sold for over Rs 200 crore. Without this, the net profit may have been flat, he added.

Merger impact

The company posted a total income of Rs 3,275.12 crore for the quarter ended March 31, 2007, as compared to Rs 2,867.41 crore for the quarter ended March 31, 2006. The quarterly results were not comparable, HLL said, because of the merger of Modern Foods (India) Ltd and its subsidiary with itself.

The company's domestic FMCG business grew at 12.3 per cent, with its home and personal care (HPC) businesses growing at 10 per cent and the food businesses growing at 23 per cent.

The markets had not structurally changed and no impact was seen on demand after it selectively increased prices in different categories, the company official said.

HLL indicated that brands had grown across categories, as reflected in the competitive HPC category, comprising laundry, shampoo, skin-care and soap products.

Margins, tax benefit

The merger of Modern Foods contributed about five per cent to the food business margins, bolstered also by HLL's tea and coffee brands, processed foods and ice-cream business.

The merger of Modern Foods would bring in synergies and a tax benefit, he said. The operations were at a break-even. And one of the conditions for the merger was to retain all manufacturing locations for five years, he added. Modern Foods clocked Rs 22 crore sales in the quarter. HLL shares, at Rs 199.40, were down 4.82 per cent on the BSE.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
STC floats wheat import tender for 10 lakh tonnes

Poor response to FCI wheat tender

Bay warming up as monsoon hits South-East Asia

BPOs must scale up for big global contracts, says KPMG

17 cos join hands to build Asia-America gateway

Abbott's anti-AIDS drug may become cheaper

Reliance Comm Q4 net profit jumps to Rs 686 cr

HLL first-quarter net declines 11.3%

MindTree net jumps 66.1%

Better growth, but not without trouble spots

Worldwide IT market will expand marginally: IDC

Panel set up for sustaining FCV tobacco export potential

10-year-old equity funds turn in 20% returns

Over 300 ONGC ex-staff apply for re-employment

P.J. Nayak back at UTI Bank helm

ICICI Bank stock plunges 7%

SEBI may form panel for IPO-scam issue