Volume contracted by 7 percent in June quarter, against street expectations of 11-13 percent contraction.
FMCG major Hindustan Unilever on July 21 has reported a standalone profit of Rs 1,881 crore for the quarter ended June 2020, increasing 7.2 percent compared to previous quarter, supported by sharp fall (down 31.4 percent) in advertising and promotion expenses, and strong double digit growth in foods & refreshment segment. However, it was impacted by exceptional expenses with respect to restructuring and acquisition.
Standalone revenue from operations during the quarter stood at Rs 10,560 crore, increasing 4.4 percent compared to Rs 10,114 crore in corresponding period last year.
Overall numbers were ahead of estimates. Profit was expected at Rs 1,790 crore on revenue at Rs 9,875 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.
"In a challenging context of COVID-19 disrupting markets and operations, HUL delivered a resilient performance with reported turnover growth of 4 percent and profit after tax and before exceptional items growing by 7 percent. Domestic consumer growth (excluding impact of merger with GSK Consumer Healthcare India) stood at -7 percent," company said in its BSE filing.
"Heath, Hygiene and Nutrition constituting 80 percent of portfolio delivered healthy mid-single digit domestic consumer growth. The integration of GSK-CH's nutrition business with us was done seamlessly with good performance on both growth and margins," it added.
Volume contraction was far less than analysts expectations of 11-13 percent for the quarter.
On a consolidated basis, profit in June quarter 2020 grew by 5.9 percent to Rs 1,898 crore and revenue increased 3.5 percent to Rs 10,731 crore compared to June quarter 2019.
"Our performance in the quarter has been resilient and reflective of the intrinsic strength of our portfolio, agility in operations, excellence in execution, purpose-driven leadership and our strong balance sheet," Sanjiv Mehta, Chairman and Managing Director said.
"While constraints continue due to restrictions in several parts of the country and the near-term demand outlook remains uncertain, we remain well positioned to drive competitive, profitable, and responsible growth. The long-term structural opportunity of FMCG in India also remains intact," he added.
Revenue from its home care segment fell 2.1 percent year-on-year to Rs 3,392 crore and its EBIT declined 8.9 percent to Rs 637 crore, while beauty & personal care division registered a 12 percent decline in revenue at Rs 4,039 crore and its EBIT dropped 16.5 percent to Rs 1,134 crore in Q1FY21.
However, its foods & refreshment segment showed strong growth of 51.7 percent at Rs 2,958 crore and 53.6 percent increase in EBIT at Rs 582 crore for the quarter ended June 2020 YoY.
Exceptional items in June quarter included restructuring expenses of Rs 29 crore, and acquisition and disposal related cost of Rs 89 crore.
At operating level, its standalone earnings before interest, tax, depreciation and amortisation (EBITDA) fell 0.1 percent year-on-year to Rs 2,644 crore and margin declined 120 bps to 25 percent in June quarter 2020. A CNBC-TV18 poll estimates for EBITDA were at Rs 2,464 crore with margin at 25 percent.
"The negative impact of adverse mix and higher COVID-19 related costs were deftly managed by dialing up savings and unlocking synergies of GSK-CH merger enabling us to sustain healthy EBITDA margins of 25 percent," HUL said.
The board of directors also approved the distribution by means of a special dividend of Rs 9.50 per equity share face value of Re 1 each resulting in total dividend payout to Rs 2,232 crore.HUL share price fell 5 percent during the quarter ended June 2020 and rallied 21.3 percent year-to-date against 10 percent rally and 4 percent gains in Nifty FMCG index respectively.