The stock market did not react favourably to Hindustan Unilever’s (HUL) upbeat performance for the quarter ended December’07 backed by a robust growth in its personal products and processed foods business. While Sensex sprang by more than 2%, the company’s scrip closed almost flat on the bourses at Rs 193, after trading in the range of Rs 190 to Rs 198.80.
The December quarter is generally a high-demand quarter for FMCG industry and a chilly winter proved to be good for Hindustan Unilever by boosting the sales of its skin care brands. For the quarter ended December 2007, the company has posted 16.8% increase in revenues while its bottom line grew by over 23.5% over the same period last year. The company has been able to achieve around 13% enhancement in its operating profits. Among various expenditure heads, staff cost witnessed the largest increase at 45.6%.
The company’s expenditure on advertisement and promotion witnessed a significant jump of 32%. This increase comes on the heels of ITC’s launch of toiletries and soaps under the brand name Fiama Di Wills during the quarter ended December. The company’s top-end brands in skin care are facing competition from Procter and Gamble’s Olay skin care products.
Cost of goods sold also moved up by 11%, primarily due to the rise in input costs of crude and palm oil. To off-set the effect of increased costs on the margins, the company resorted to staggered price increase across its various products.
Segment wise break-up reveals double-digit growth in revenues across various products with one of the largest being in processed foods at 41% while the lowest rise was seen in ice creams at 11%. The only drop in revenues was witnessed in case of exports.
All product verticals except ice creams and beverages have registered solid double-digit growth. The company’s ice cream business didn’t perform well leading to a 61% drop in profits for the quarter ended December’07 and beverages registered a drop of around 14.5% in profitability. Consolidated net sales for the financial year ended December’07 stood at Rs 13,913 crore, charting a y-o-y rise of 12%. While operating profits grew by 18%, the net profit after excluding the exceptional items grew by mere 1.3%.
The processed foods segment witnessed the highest increase of 40% in revenues during the year 2007 against the 2006 fiscal. It also witnessed a whopping 92% growth in profits. At Rs 6,374 crore, the largest category of soaps and detergents witnessed a growth of 14% in revenues. Ice creams and exports however witnessed a drop in profitability by 22.5% and 25% respectively.
The December quarter is generally a high-demand quarter for FMCG industry and a chilly winter proved to be good for Hindustan Unilever by boosting the sales of its skin care brands. For the quarter ended December 2007, the company has posted 16.8% increase in revenues while its bottom line grew by over 23.5% over the same period last year. The company has been able to achieve around 13% enhancement in its operating profits. Among various expenditure heads, staff cost witnessed the largest increase at 45.6%.
The company’s expenditure on advertisement and promotion witnessed a significant jump of 32%. This increase comes on the heels of ITC’s launch of toiletries and soaps under the brand name Fiama Di Wills during the quarter ended December. The company’s top-end brands in skin care are facing competition from Procter and Gamble’s Olay skin care products.
Cost of goods sold also moved up by 11%, primarily due to the rise in input costs of crude and palm oil. To off-set the effect of increased costs on the margins, the company resorted to staggered price increase across its various products.
Segment wise break-up reveals double-digit growth in revenues across various products with one of the largest being in processed foods at 41% while the lowest rise was seen in ice creams at 11%. The only drop in revenues was witnessed in case of exports.
All product verticals except ice creams and beverages have registered solid double-digit growth. The company’s ice cream business didn’t perform well leading to a 61% drop in profits for the quarter ended December’07 and beverages registered a drop of around 14.5% in profitability. Consolidated net sales for the financial year ended December’07 stood at Rs 13,913 crore, charting a y-o-y rise of 12%. While operating profits grew by 18%, the net profit after excluding the exceptional items grew by mere 1.3%.
The processed foods segment witnessed the highest increase of 40% in revenues during the year 2007 against the 2006 fiscal. It also witnessed a whopping 92% growth in profits. At Rs 6,374 crore, the largest category of soaps and detergents witnessed a growth of 14% in revenues. Ice creams and exports however witnessed a drop in profitability by 22.5% and 25% respectively.
