Unilever profits grow slightly in challenging first half

Demand slowdown and energy crisis affect performance.

KARACHI:

In a sign of slowdown in at least some areas of consumer spending, Unilever Pakistan’s revenues grew less than a tenth and profit showed slight growth in the financial results for first six months of 2013.

The Anglo-Dutch foods and consumer goods giant earned Rs30 billion in revenues in the first half of 2013, an increase of 8.3% compared with Rs27.8 billion in the same period last year.

Profit for the six months ended June 30, 2013 amounted to Rs2.3 billion or Rs174.5 per share, down 3.5% from Rs2.4 billion or Rs180.9 per share it had earned during the same period last year.

The company, however, had a strong April-June quarter, posting Rs1.6 billion or Rs123.25 per share in profit, a 20% increase over Rs1.4 billion or Rs102.64 per share it earned in the same period last year.

Revenues for the quarter clocked in at Rs16.2 billion, a rise of 13.1% from Rs14.3 billion in the corresponding period of 2012.

The company also announced 100% dividend of Rs123.25 for the half year ended June 2013.

It has already announced delisting from the Karachi Stock Exchange – the ordinary shares of the company will stand delisted with effect from September 13.

The strong quarterly performance comes on the back of improved margins and volumetric growth, said Khurram Shehzad, Head of Research at Arif Habib Corporation. Inflation is also a factor which results in increase in product prices, he said.

The company, in a statement accompanying the financial results, attributed the quarterly growth to the gross margin, which rose 90 basis points mainly through “savings programmes and a more favourable mix of categories”.

Talking about the half-yearly performance, Shehzad said Unilever has already penetrated much with sales showing a lot of growth. Even a slight increase in volumes is a good result, he said.

The company, on the other hand, described the first half as challenging with continuing energy crisis, adverse security environment, market closures and slowdown in consumer demand.

Published in The Express Tribune, August 24^th 2013.

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