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Hindustan Unilever Ltd (HUL) reported a net profit of Rs 754 crore for the third quarter ended December 2011, up from Rs 637 crore in the same period a year ago.
The company's net sales stood at Rs 5,852 crore (Rs 5,027 crore), with domestic FMCG sales (Home and Personal Care, and Foods) accounting for Rs 5,434 crore (Rs 4,637 crore).
The domestic consumer business witnessed 16.5 per cent value growth with volume growth of just 9.1 per cent.
Maximum revenue growth was in soaps and detergents at 21 per cent, accounting for Rs 2,645 crore.
“In soaps and detergents, the market has seen single-digit growth increase and negative volume growth. Across most categories, industry growth has slowed down in the December quarter,” said Mr R. Sridhar, Chief Financial Officer, HUL.
“Our growth has been competitive and profitable in a challenging business environment,” he added.
Personal (hair and skin) care products grew 14 per cent to contribute revenue of Rs 1,886 crore.
Double-digit price increases in key categories, effected in phases during the quarter, contributed to revenue growth even as volume growth was challenged, said Mr Sridhar.
He added that price increases were accompanied by measures to improve cost efficiencies.
Advertising & Promotion
Advertising and promotion expenses were down to Rs 690 crore from Rs 745 crore a year ago.
But this was up from Rs 651 crore in the quarter ended September 2011.
Compared to the September 2011 quarter, employee cost was down to Rs 274 crore (Rs 287 crore).
Bigger retail bite
Even as the company evaluates ways to increase volumes and margins, HUL's pilot with ‘Bru World Cafe' outlets continues to gather steam. The ninth outlet is getting ready in Mumbai's Bandra suburb.
The project is being piloted in Mumbai and a national rollout is expected to follow, though no time line has been revealed.
The retail rollout is an effort to increase the company's share of revenue from beverage consumption. The journey began with vending machines in 2002.
The company already has 170 Lakme salons (it claims to have rolled out one every week last year), and 201 Kwality Swirl outlets, of which a sizeable number are said to have started operations in 2011.
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