FMCG major Hindustan Unilever ltd on Wednesday reported a decline of 2.62 per cent in standalone net profit to Rs962.24 crore for the second quarter ended September 30, 2015-16, on account of phasing out of excise duty incentives and price reductions.
The company had posted net profit of Rs988.16 crore in the July-September quarter of the 2014-15.
HUl’s net sales however climbed 4.74 per cent to Rs7,819.64 crore during the quarter under review as against Rs7,465.54 crore a year ago, the company said in a statement.
“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,” HUl added.
On the outlook, HUl Chairman Harish Manwani said: “The deflationary commodity cost environment is likely to continue in the near term and our strategy of delivering consistent and competitive growth with sustainable improvement in operating margin remains unchanged.”
In a conference call, HUl Chief Financial Officer PB Balaji said the impact of phasing out of excise incentives would continue in the next two quarters till it cools down by around March.
Over the impact of deficient monsoon and slowdown in rural markets, Balaji said: “It would be too early to say about that... However, we also do not see any substantial growth in the rural areas”.
HUl’s expenses in the second quarter were up 3.58 per cent to Rs6,705.67 crore, as against Rs6,473.68 crore a year ago. Tax expense was up 6.66 per cent to Rs445.47 crore, compared to Rs417.64 crore.
The company’s revenue from soaps and detergents segment was up 1.63 per cent in the second quarter at Rs3,816.57 crore, as against Rs3,755.10 crore of the same quarter last fiscal.
Revenue from personal products was up 9.46 per cent to Rs2,345.57 crore during the second quarter, as against Rs2,142.74 crore in the same period of FY 2014-15.
The beverage segment was up 5.94 per cent to Rs952.55 crore, as against Rs899.13 crore.
Similarly, packed foods were also up 12.35 per cent to Rs507.09 crore during July-September period as against Rs 451.31 crore of the same quarter of FY 2014-15.However, other segments which include exports, water,infant care business were down 10.37 per cent to Rs324.27 crore in Q2 as against Rs361.80 of the July-September period of the last fiscal.
HUl’s standalone net profit for the first half of the 2015-16 was also down 1.15 per cent to Rs2,021.38 crore as against Rs2,045.01 crore of the same period of last fiscal.
However, net sales during the six month period of the current fiscal were up 5.03 per cent to Rs15,793.01 crore as against Rs15,036.32 crore a year ago.
In a separate filing HUl informed that its board in a meeting held on Wednesday declared an interim dividend of Rs6.5 per equity share of face value Rs1 each, for the year ending March 31, 2016.
HUl stock closed at Rs797.40, down 1.85 per cent, on the BSE.