Companies

Rising raw material cost dampens Hindustan Unilever net in Q4

Our Bureau | | Updated on: May 09, 2011

BL10_03_HUL | Photo Credit: SHASHI ASHIWAL

FMCG major Hindustan Unilever Ltd reported a standalone net profit of Rs 2,306 crore (Rs 2,202 crore) for the year ended March 31. However, net profit dipped in the fourth quarter to Rs 569 crore (Rs 581 crore) in the corresponding period last year, even as sales revenue jumped 13 per cent to Rs 4,899 crore.

Factors contributing to lower margins include rising input costs driven by crude and palm oil. The company's raw material cost increased 19 per cent to Rs 2,105 crore (Rs 1,773 crore) in the fourth quarter.

Mr Nitin Paranjpe, MD and CEO, HUL, said, “We saw the input costs rising all through the last quarter, while there was some respite in the form of a correction in April. We expect the inflation to continue, but we are likely to see volatility as well.”

The company, which had announced an interim dividend of Rs 3 a share, has proposed a final dividend of Rs 3.5 a share. HUL resolved to close the Register of Members of the Company from July 12 to 27, for the purpose of payment of final dividend and AGM.

HUL disclosed that its detergent brand Rin's turnover crossed Rs 1,000 crore in FY '11, of the total revenue of Rs 19,401 crore (Rs 17,524 crore).

De-merger of exports business

The company will de-merge its export business, including specific exports-related manufacturing units, into its wholly owned subsidiary Unilever India Exports Ltd.

Mr Harish Manwani, President Asia, Africa, Central and Eastern Europe, Unilever, said, “There is a huge opportunity to address the needs of the Indian Diaspora. In the new global context that has emerged, we would like to view exports in a strategic, value-creating way.”

Soap brand Pears, which is produced only in India, is among the top exports for HUL. Export revenue for the fourth quarter was up 9 per cent at Rs 278 crore (Rs 255 crore).

The company is banking on categories such as tea and coffee, and some ‘iconic' brands such as Fair & Lovely from the Indian stable going to Diaspora markets such as the Gulf, the UK, pockets of the US and Africa.

The company also stated that its rural reach has gone up by 5,00,000 outlets in the last financial year.

This takes the total reach to 15,00,000 outlets, split evenly across urban and rural India.

Advertising and promotion expenses were marginally down in Q4 to Rs 623 crore (Rs 627 crore).

Mr Paranjpe said, “Advertising and promotion spends were lower across the industry, largely in the soaps and detergents category. Our A&P spends were at 12.7 per cent of sales revenue, keeping us very competitive.”

Published on May 09, 2011
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