Hindustan Lever Limited's net profit shot up by 35.12 per cent to Rs 380.59 crore (Rs 3.8 billion) for the second quarter ended June 30, of financial year 2006, as compared with Rs 281.65 crore (Rs 2.81 billion) registered in the corresponding period last year.
HLL attributed the rise in net profit to cost-saving initiatives as well as buying efficiencies.
Net sales of the company were up by 8.70 per cent to Rs 3,083.23 crore (Rs 30.83 billion) for the quarter, as against Rs 2,836.32 crore (Rs 28.36 billion) last year.
According to Harish Manwani, chairman, HLL: "Cost-saving initiatives as well as buying efficiencies mitigated the impact of escalating costs. These savings, together with selective price increases, improved the gross margin. A significant part of this margin increase was redeployed in supporting brands for driving sales growth. Consequently, the advertisement and promotion spend for the quarter was higher by 20.5 per cent."
The board of directors of HLL has declared an interim dividend of Rs 3 per equity share of Re 1 each.
Manwani further said: "We continue to be encouraged by the growth in our markets, particularly with rural markets gaining momentum. Our strong portfolio of brands across price points is helping us sustain the growth momentum across a large spectrum of categories. We remain focused on driving cost efficiencies and investing appropriately behind our brands. Cost inflation on the back of rising crude prices remains a challenge, and is being rigorously addressed."
For the half year (H1) ended June 30, of financial year 2006, HLL's net profit was up 54.81 per cent at Rs 823.45 crore (Rs 8.23 billion), as against Rs 531.89 crore (Rs 5.31 billion) registered in the corresponding period last year.
Net sales of the company went up by 10.08 per cent to Rs 5,881.28 crore (Rs 58.81 billion) for H1 2006, from Rs 5,342.70 crore (Rs 53.42 billion) registered in H1 last year.
The FMCG business grew by 12.1 per cent to Rs 2,730 crore (Rs 27.3 billion) for the second quarter, as against Rs 2,434.89 crore (Rs 24.34 billion) in the corresponding period last year.
The HPC business witnessed a strong performance with 13.9 per cent sales growth, touching Rs 2,286.37 crore (Rs 22.86 billion), as against Rs 2,007.07 crore (Rs 20.07 billion) clocked last year.
Consumer-relevant innovations, effective market activation, and appropriate brand support continued to be the key drivers for the all-round growth.
The innovations during the quarter included the launch of Clinic All Clear Ice and Cool Variant and re-launch of Surf Excel, Pepsodent and Vim Liquid, said Manwani.
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