Hindustan Unilever reported a 2.6% fall in second-quarter profit, missing analysts' expectations, as it cut prices.
Hindustan Unilever Ltd, India’s biggest consumer goods company, on Wednesday said its net profits for the fiscal second-quarter fell 2.6% from a year earlier, because of an exceptional income from the sale of properties during the base quarter, and a higher effective tax rate.
During the July to September period, Hindustan Unilever’s net profit was at Rs962.24 crore compared to Rs988.16 crore, a year earlier, the company said in a statement. Its sales grew 4.7% during the quarter to Rs7,819.64 crore during the just-ended quarter.
“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,” it said.
The profits were impacted due an Rs9.62 crore debit in the quarter under review as profit on sale of surplus properties and restructuring expenses of Rs2176 crore, the company said. Its tax expenses rose 6.67% during the quarter to Rs 445.47 crore.
Hindustan Unilever said sales were higher during the quarter, helped by a 5% increase in domestic consumer business with a 7% underlying volume growth. During the quarter, lower input costs resulted in a 320 basis points reduction in cost of goods sold, the company 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,” Harish Manwani, chairman of Hindustan Unilever said in a statement.