Hindustan Unilever has posted disappointing June quarter results with muted volume growth. Its net profit rose 9.8 percent at Rs 1174 crore in April-June quarter from Rs 1069.2 crore in year-ago period. This was aided by a one-time write back of provision benefits arising from plan amendments.
In Q1, its total income was up marginally 3.6 percent at Rs 8128.2 crore compared to Rs 7844.5 crore year-on-year.
HUL's net profit was in-line with estimates but total income was below expectations while the company says near-term market growth is likely to remain muted going ahead. Its volume growth in Q1 was at 4 percent from 6 percent on annual basis but unchanged on sequential basis.
According to CNBC-TV18 poll, its profit was expected to increase 10 percent year-on-year to Rs 1156 crore on margin expansion. Revenue was seen rising 5.6 percent to Rs 8,557 crore in the quarter ended June 2016 from Rs 8,105 crore in year-ago period with volume growth around 4.5-5.5 percent.
Harish Manwani, Chairman says, "In slow market conditions, the business is tracking ahead of the market with sustained margin improvement. We continue to make progress on our priorities of strengthening the core of our business whilst driving operational efficiencies. While the near term growth is likely to remain muted, we are optimistic for the medium term & remain focussed on driving competitive & profitable growth."
The FMCG major is going to invest Rs 1000 crore in new manufacturing plant in Assam.
During the quarter, EBITDA was up 8.2 percent at Rs 1635.9 crore from Rs 1512 crore while EBITDA margin grew to 20.1 percent from 19.3 percent (YoY).
In a press statement HUL said that its lower input costs resulted in 100 basis points reduction in cost of goods sold.
Segment-wise, personal care revenue was slightly up 2.1 percent at Rs 3898.6 crore against Rs 3817.1 crore (YoY). HUL says that Lifebouy, Pears, Dove led category volume growth while skin care growth was led by premium segment with BB and CC creams. Personal care EBIT margin was up 0.3 percent at Rs 1021.4 crore from RS 1018.4 crore (YoY).
Its homecare revenue climbed 6.8 percent at Rs 2559.6 crore versus Rs 2397.2 crore (YoY). It says that in fabric wash growth was driven by premium segment with surf and in household care Vim liquids did well. Homecare EBIT rose 22.4 percent at Rs 355 crore against Rs 290.1 crore.
However, its food business did not do well with EBIT falling 20.6 percent at Rs 17 crore against Rs 21.4 crore. Foods revenue was up 4.7 percent at Rs 267 crore against Rs 255 crore.Refreshments revenue was up 5.5 percent at Rs 1191 crore against Rs 1130 crore and EBIT increased 7.5 percent at Rs 192 crore against Rs 178.6 crore (YoY).Posted by Nasrin Sultana
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