The Hindu Business Line : HUL sales grow 19%; ‘inflation a worry’

Mumbai April 28 Consumer goods maker Hindustan Unilever Ltd reported a 3 per cent dip in net profit for the quarter ended March 31, 2008, to touch Rs 380.95 crore from Rs 392.89 crore in the corresponding quarter of the previous fiscal.

However, the company said the figures were not comparable, as the net profit for the quarter ended March 31, 2007 had one-time extraordinary gains aggregating Rs 65.81 crore. The extraordinary items included one-time tax credit on amalgamation of Modern Foods amounting to Rs 45.9 crore and profit from transfer of two of its factory units and a land asset into subsidiary amounting to Rs 17.5 crore.

Net sales grew by 19.1 per cent to touch Rs 3,793.94 crore during the quarter, against Rs 3,184.32 crore in the year-ago period.

Mr Harish Manwani, Chairman, said: “Inflationary pressures are a cause for concern, but market growth continues to be strong and there is no evidence as yet of any significant impact on summer spending in our FMCG categories. We are confident of effectively managing the inflationary challenges in a competitive context.”

Mr D. Sundaram, Vice-Chairman, told newspersons that food business grew at 15.1 per cent.

Capex programme

He said the company had lined up a capital expenditure programme of Rs 500 crore, which included investments to ramp up production capacities. He did not see the company’s advertisement spend coming down this fiscal. “Advertisement campaigns are essential for a FMCG company like ours.” During the quarter, the advertising and promotion spend was Rs 432 crore (Rs 356 crore).