Hindustan Unilever (HINDUNILVR) Q4 1998 earnings summary

Executive summary

• 1998 gross turnover rose 22.4% YoY and net turnover rose 21.3%; growth slowed as the year progressed amid weaker economic growth and rural spending.

• Net profit after tax and exceptional items increased to Rs 805.71 crore from Rs 560.37 crore; reported EPS rose to Rs 36.70 from Rs 28.14.

• 1998 figures include Pond’s (India) from Jan. 1 under the merger and are not comparable with 1997.

Financial highlights

• Net turnover was Rs 9,481.85 crore vs Rs 7,819.71 crore; gross turnover was Rs 10,215.24 crore vs Rs 8,342.75 crore.

• PBT before exceptional items increased to Rs 1,130.44 crore from Rs 850.25 crore; net profit before exceptional items was Rs 837.43 crore vs Rs 580.25 crore.

• Net profit after exceptional items was Rs 805.71 crore vs Rs 560.37 crore; exceptional items, net of tax, were a Rs 31.72 crore charge vs Rs 19.88 crore.

• Exports by the group rose 44% to Rs 1,664 crore; a positive foreign-exchange surplus of Rs 282 crore was recorded, including subsidiaries.

Outlook and guidance

• Record agricultural value added was expected in 1999, with higher rural incomes anticipated to stimulate demand, particularly in H2.

• Ice cream distribution expansion, affordable Impulse products and new product launches were expected to strengthen performance in 1999 and beyond.

• Dairy and Animal Feeds businesses were identified for potential disposal; negotiations with prospective buyers were under way, subject to shareholder approval and final terms.