FMCG major Hindustan Unilever on Thursday reported a decline of 3.93 per cent in consolidated profit to Rs 1,512 crore for the fourth quarter, impacted by the coronavirus crisis from mid-March.
The company had posted a net profit of Rs 1,574 crore in the January-March period of the previous fiscal.
Sales during the quarter under review stood at Rs 9,055 crore, down 9.61 per cent from Rs 10,018 crore in the corresponding period a year ago, Hindustan Unilever Ltd (HUL) said in a regulatory filing.
"The spread of COVID-19 impacted the business from mid-March, which culminated into scaling down of operations post the national lockdown. Domestic Consumer Growth declined by 9 per cent with a decline of 7 per cent in underlying volume growth. Reported EBITDA margin reduced by 40 bps," said HUL.
However, the company said its "performance has been competitive with corporate market share gains" in this challenging economic context.
HUL's total expenses were at Rs 7,412 crore as against Rs 7,958 crore, down 6.86 per cent.
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HUL CMD Sanjiv Mehta said the COVID-19 pandemic hit the FMCG market hard and the sector was already decelerating before the outbreak of the disease.
"Just before the outbreak of COVID-19 we had a scenario where the markets were slowing down...The decrease of market growth was more accentuated in rural than urban and that was the scenario when COVID-19 picked up," he said while addressing a media concall.
While the health crisis had its implications in February, the immediate impact in March was predominantly on the supply line when supplies got disrupted and then later on when the national lockdown happened it impacted demand, he added.
Mehta said HUL's sales volume decline in the fourth quarter was the first since demonetisation in 2016.
Terming COVID-19 as "perhaps the biggest challenge for us both from the lens of sustaining lives as well as livelihoods", he said, "The human impact of the pandemic is uncertain, and we are fully committed to working with the government and our partners to ensure that we overcome this crisis together."
"For FY 2019-20, Domestic Consumer Growth was 2 per cent with Underlying Volume Growth of 2 per cent," said HUL, adding, "We sustained our track record of strong cash generation."
Mehta further said, "Then the severity and duration of the economic impact and also very importantly, with economic activities slowing down will there be impact on demand? The critical question will be has the demand been deferred or has it been shifted or are we talking about whether the demand has been lost?"