Hindustan Unilever (HINDUNILVR) Q4 1997 earnings summary

Executive summary

• Power-brand focus, food-business restructuring and non-core divestments supported profitable growth despite weak markets and intensified competition.

• Net sales rose 3.5% to Rs.10,972 crore; reported net profit increased 25.3% to Rs.1,641 crore, including Rs.100 crore of net exceptional income.

Financial highlights

• PBDIT increased 15.9% to Rs.2,096 crore; PBT before exceptional items rose 16.7% to Rs.1,943 crore.

• Excluding exceptional items, net profit was Rs.1,541 crore, up 17.6%; reported net profit was Rs.1,641 crore, up 25.3%.

• Net sales advanced 3.5% to Rs.10,972 crore, while operating expenses rose 1.3%; cost of goods sold fell 1.4% to Rs.6,354 crore.

• Total dividend increased to Rs.5 per share from Rs.3.50; interim and recommended final dividends were Rs.2.50 each.

Outlook and guidance

• 2002 plans assumed GDP growth of no more than 5%; growth of 6% or more and higher agricultural incomes could provide upside.

• FMCG growth was expected to depend on economic recovery and rural incomes; supply-chain initiatives were slated for rollout across FMCG businesses in 2002.

• Planned priorities included strengthening Power Brands, reversing declines in atta and salt, and implementing an ice-cream turnaround through portfolio, supply-chain and cost actions.

• Traded exports were to be phased out in 2002; tea-bag orders for Unilever Australia and the US were expected to begin production in H2 2002.