Hindustan Unilever (HINDUNILVR) Q4 2002 earnings summary

Executive summary

• FY2002 net profit before exceptional items rose 11.4% to Rs 1,717 crore; operating profit grew 16.6% as operating margin expanded 390 bps despite weak demand and intense competition.

• Net sales declined 6.7%, primarily from discontinuing non-value-added traded exports and business disposals; FMCG accounted for 86% of sales, with the balance largely Core Exports.

Financial highlights

• Net sales were Rs 9,954.85 crore versus Rs 10,667.56 crore in 2001; PBT before exceptional items rose 13.1% to Rs 2,197.12 crore.

• PAT before exceptional items was Rs 1,717.27 crore, up 11.4%; reported net profit including exceptional items was Rs 1,755.69 crore versus Rs 1,641.31 crore.

• EPS increased to Rs 7.98 from Rs 7.46; proposed dividend was Rs 3.00/share, in addition to interim dividend of Rs 2.50/share.

Outlook and guidance

• 2003 outlook was cautious, with GDP growth expected at ~5%; business plans for revenue and profit growth were based on that economic assumption.

• Growth priorities included innovation and investment behind power brands, improved cost competitiveness, and continued strengthening of core capabilities.

• Project Shakti was planned to expand over three years to 30,000 villages across eight states, targeting 10 million households; 2003 rollout was planned in Uttar Pradesh and Madhya Pradesh.