Hind Lever net profit flat at Rs 325.96 cr

FMCG major Hindustan Lever Ltd (HLL) has posted a net profit of Rs 325.96 crore for the quarter ended September 30, 2005, an improvement of a mere 0.5 per cent over Rs 324.32 crore reported by the company in the corresponding quarter of the previous year.

Last year's results included an exceptional income of Rs 41.85 crore relating to sale of property. Without this, the net is up by 15.2 per cent.

HLL's net sales increased 13.76 per cent""from Rs 2,401.14 crore in July-September 2004 to Rs 2,731.54 crore recorded in the last quarter. The sales of home and personal care products grew 16.1 per cent in the domestic market. The sales of food products in the Indian market grew 14.9 per cent. Exports, however, fell 7.6 per cent to Rs 273.1 crore.

P Sundaram, HLL director (finance), said although most of its product categories had grown in the last quarter, there was a slight decline in speciality exports like that of castor. Domestic FMCG sales of the company grew by 15.9 per cent to Rs 2383.1 crore.

The HLL stock today gained 2.54 per cent on the Bombay Stock Exchange to close at Rs 161.40.

HLL's operating profit growth did not keep pace with the growth in net profit. Earnings before interest and tax grew just 3.2 per cent from Rs 334.91 crore in the July-September quarter of 2004 to Rs 345.74 crore.

Sundaram attributed this to cost pressures. Costs went up due to a spurt in international oil prices and a 22 per cent increase in the company's advertising and sales promotion expenses, which was a part of HLL's brand-building strategy.

HLL Chairman Harish Manwani, in a release, admitted that cost pressures continued to be of concern, although partly neutralised by cost effectiveness programmes and selective price increases.

HLL's net profit before exceptional items rose 15.2 per cent from Rs 282.47 crore to Rs 325.35 crore, owing to savings on interest cost and taxes and a special dividend from one of its subsidiaries. Interest costs fell about 86 per cent, in step with the previous two quarters, since the company's bonus debentures were redeemed last year.

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Flat gains

Net sales increased 13.76% to Rs 2,731.54 crore

Exports fell 7.6% to Rs 273.1 crore

Domestic FMCG sales grew 15.9% to Rs 2383.1 crore

Earnings before interest and tax grew 3.2% to Rs 345.74 crore