Anglo-Dutch Unilever’s India arm net dips 22.4%

FMCG major HUL on Friday reported 22.42 per cent dip in standalone net profit at Rs 971.40 crore for the third quarter, marking second successive quarterly decline in the current fiscal, hit by phasing out of excise duty incentives and falling prices.

The company, which had posted a net profit of Rs 1,252.17 crore in the year-ago period, also said its board has approved transfer of Rs 2,187.33 crore from its general reserves to the profit and loss account to be paid out to shareholders.

HUL's net sales were up 3.21 per cent to Rs 7,822.86 crore during the third quarter ended December 31, 205-16, as against Rs 7,579.18 crore in the year-ago period. "The growth in the quarter continued to be impacted by the phasing out of excise duty incentives and price de-growth, as the benefit of lower commodity costs was passed on to consumers," Hindustan Unilever Ltd said. Addressing a conference call, HUL Chief Financial Officer PB Balaji said the impact would continue to be felt in the next quarter as well.

"Besides, some of the products in the personal care segment were impacted by delayed winter this season," he said. On the outlook, HUL Chairman Harish Manwani said: "In an environment of moderating growth and benign input costs, we remain focused on innovation and market development to drive volumes competitively whilst improving operating margins." 

HUL's expenses in the third quarter were up 1.78 per cent at Rs 6,632.34 crore, as against Rs 6,515.90 crore a year ago. However, its tax expense was down 15.70 per cent to Rs 437.20 crore compared to Rs 518.66 crore of the same period last fiscal. HUL stock closed at Rs 804.15, down 2.70 per cent, on BSE. On the transfer of Rs 2,187.33 crore from its general reserves to the profit and loss account, HUL said it has built up significant reserves over the years through the transfer of profits to the General Reserves. "Given HUL's strong financial position and track record of cash generation, the funds represented by such accumulated general reserves is seen to be in excess of the company's current and anticipated needs... HUL has proposed a scheme between the company and its shareholders to give effect to the proposed transfer and its subsequent payout," it said. 

During the quarter, HUL said, revenue from soaps and detergents segment was up 0.82 per cent at Rs 3,629.82 crore, as against Rs 3,600.22 crore a year ago.

The robust volume growth in soaps and detergents segment was offset by price deflation and it witnessed continued price deflation in the quarter given the benign input costs, HUL said.  HUL's revenue from personal products was up 5.63 per cent at Rs 2,592.93 crore during the third quarter, as against Rs 2,454.55 crore in the same period of 2014-15.