HLL net up 26.4%, announces Rs 1.5 dividend

MUMBAI, JULY 28: Hindustan Lever Ltd (HLL) has reported a 26.4 per cent rise in its net profit at Rs 286.74 crore in the second quarter of...

MUMBAI, JULY 28: Hindustan Lever Ltd (HLL) has reported a 26.4 per cent rise in its net profit at Rs 286.74 crore in the second quarter of 2000, as compared to Rs 226 crore recorded in the same fiscal of last year.

Addressing a news conference, HLL chairman, M S Banga announced an interim dividend of Rs 1.5 per share of Re 1, an increase of 25 per cent over last year’s interim dividend of Rs 12 per share of Rs 10 each. The net sales for Q2 was Rs 2,879.72 crore as against Rs 2,752.78 crore.

Riding on a steady volume growth of 5.5 per cent, the net profit in the first half of 2000 has shown a 25 per cent growth at Rs 549.35 crore, as against Rs 439.62 crore recorded in the previous year.

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The volume growth in the first half was at 5.3 per cent while turnover (net of excise) is up by 5.8 per cent at Rs 5,493.79 crore as prices remained stable. Gross profit was Rs 797.33 crore in first half of current calendar year as against 652.91 crore.

Banga said the growth of premium brands, coupled with continuing improvement in productivity and supply chain efficiencies had led to strong profit growth. Other income rose by 33 per cent to Rs 77.37 crore on account of efficient treasury management, he added.

Overall sales growth in the June quarter had, however, been dampened by flat ice cream sales and a decline in oils and fats businesses. Exports business, however, registered a growth of 19 per cent, he added.

Expecting a much higher overall growth rate in the second half due to good monsoon and political and economic stability, Banga said the future growth of the company would be driven mainly by volume and pricing structure of products would play a supplementary role in the growth.

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The net profit margin of the company improved by over 150 basis points mainly due to the growth of over 20 per cent in premium brands as well as continuing improvement in productivity and supply chain efficiencies.

During the first half, the home and personal care business grew by 6 per cent led by a 9 per cent growth in fabric wash and 28 per cent in hair care. The tea business has rebounded with a healthy growth of 16 per cent while popular goods like Annapurna Atta recorded an impressive growth of 29 per cent. However, ice cream sales remained flat and the oils and fats business declined both in volume and value due to substantial decline in overseas prices.

Besides, Banga said that there was a growth of 32 per cent in other income which included treasury operations and value addition in the product-chain.

Financial results for the second quarter include an estimated business restructuring cost of Rs 30 crore charged in the three month period as compared to Rs 33 crore in the same quarter last year.