Unilever profit surges 54%

Consumer goods giant protects its profit margins

Unilever Pakistan’s profit rose 54 per cent to Rs889 million during January to March owing to reduction in financial charges.

The country’s largest manufacturer of consumer products, satisfied with the growth, said in a statement on Friday that margins benefited from timely price corrections in order to cover higher input costs. Unilever predicts that this year the total global input cost of inflation will be “around four per cent of total turnover”.

However, Unilever Pakistan’s turnover surged 19 per cent to Rs12.2 billion in the quarter ended March 31 compared with Rs10.26 billion in the same period last year, according to a company statement sent to the Karachi Stock Exchange.

The home and personal care sector jumped 23 per cent on the back of enhanced consumers. The company’s surf products, consisting of Surf Excel and Rin, consolidated their position as the market leader. Despite the entry of new rival, the company’s ice cream sales went up 18 per cent. “Greater focus on costs and pricing changes helped maintain the gross margin,” the company said.

Smuggling hurting beverages business

The company called on the government to reduce tax rates for encouraging tea to come through legal channels as rampant smuggling is making the environment uncompetitive in the country.

Growth of the tea business, which represents 30 per cent of total sales, was affected by smuggling in 2010 as only half of the 180,000 tons of tea consumed in the country was officially imported. The other half was smuggled into the country through Iran and Afghanistan routes. Two of the biggest tea brands in the country Lipton and Brooke Bond Supreme are made by Unilever. However, successful advertisement campaigns by both the tea brands led to a growth in the quarter.





Published in The Express Tribune, April 23^rd, 2011.