Unilever Pakistan profits rose 20 percent to Rs2.57 billion on the back of higher sales of ice cream and personal care products.
The largest consumer goods manufacturer in the country beat analyst expectation by 20% as they estimated net profit to stand in the same range at Rs2.13 billion.
Net sales rose 16% to Rs38 billion in the first nine months of 2011 compared with Rs33 billion in the same period last year.
Despite 40% increase in palm oil prices, the company managed to report a gross margin of 34.5% in the period under review against gross margin of 32.6% in the same period last year, said AKD Securities analyst Misbah Iqbal.
Ice cream sales rose by 12% as innovation continues to be at the heart of the category’s strategy, said company secretary Amar Naseem in a statement. The company launched Cornetto Mango Cream, Badami tub along with at lease three more other ice creams during the period under review.
The company, maker of the largest tea brands Lipton and Brooke Bond, continued to complain about the rampant smuggling of tea due to high tax regime that results smuggling of almost half of the entire tea. Pakistani consumers pay 50% for tea than the rest of South Asia, added Naseem.
The company will benefit from its expansions into the lower-end market with the introductions of smaller packages and its diversified product portfolio in the near future, added AKD Securities analyst Misbah Iqbal.
Meanwhile, another consumer good giant Nestle announced increase in net profit by 21% to Rs3.75 billion in the first nine months of 2011 along with cash payout of Rs25 per share.
Published in The Express Tribune, October 26th, 2011.