Input costs pull down HLL net 2%

Hindustan Lever (HLL), the country's biggest consumer goods company, posted a marginal decline of 1.85 per cent in net profit to Rs 511.18 crore for the quarter ended December 31, 2006.

Net sales for the period increased 6.11 per cent to Rs 3,156.10 crore, but quarterly profit fell after six quarters of growth on higher input costs. The unit of Anglo-Dutch Unilever has had to grapple with rising vegetable oil prices.

Sales of premium skin-care products were below expectation because of a milder winter. The company has raised prices of some products, including soaps and detergents, which make up 45 per cent of the overall sales.

The results for the quarter are not comparable, as it includes the amalgamation of Vashisti Detergents with the company and the demerger and disposal of Doom Dooma and TEI plantation divisions. 
 

Rs crore	Quarter ended Dec		%  chng
	2005	2006
Net sales	2,974	3,156	6.11
Other income	64	107	67.18
PBT	511	571	11.74
Net profit	521	511	-1.91

The net profit includes exceptional items of Rs 27.75 crore compared with Rs 82.36 crore in 2005. These include the profit arising from disposal of 51 per cent stake in the shared services subsidiary (Rs 36.74 crore) and the restructuring costs of the foods business (Rs 30.88 crore), among others.

Profit after tax for the quarter was Rs 483.43 crore as compared with Rs 438.50 crore for the corresponding quarter in 2005, higher by 10.24 per cent.

The Hindustan Lever scrip declined Rs 5.45, or 2.7 per cent, to Rs 199.65 on the Bombay Stock Exchange.

Doug Baillie, CEO, HLL, said the company would roll out Pure-it, its water venture, across the country by the end of 2007. "Water is an area of big play for us and we will be pushing it aggressively," he said.

On the company's foods business, Baillie said the current year would witness an acceleration of its core food brands apart from exploring other opportunities. "The next 12 months will unveil where we are headed in the future," he said.

For 2006, FMCG sales increased by 12.8 per cent, with home and personal care and foods growing at 13.7 per cent and 9 per cent, respectively.

The board has recommended a final dividend of Rs 3 a share of Re 1 each, taking the total dividend for 2006 to Rs 6 a share against Rs 5 a share in 2005.

In 2006, net profit was higher by 31.76 per cent at Rs 1,855.37 crore compared with Rs 1,408.14 crore in 2005, while net sales increased 9.42 per cent from Rs 11,060.55 crore in 2005 to Rs 12,103.39 crore in 2006.

Profit after tax increased by 13.66 per cent from Rs 1,354.51 crore in 2005 to Rs 1,539.67 crore, indicating a significant contribution from exceptional items.