Hindustan Unilever Q1 net profit flat at Rs 1,059 cr, rural markets disappoint

New Delhi: FMCG major Hindustan Unilever’s (HUL) standalone net profit remained flat at Rs 1,059.14 crore for the first quarter ended 30 June 2015 due to subdued demand in rural markets. The company had posted a standalone net profit of Rs 1,056.85 crore in the April-June quarter of FY 2014-15.[caption id=“attachment_2290096” align=“alignleft” width=“380”]  Flat profits. Reuters[/caption] Its net sales climbed 5.31 per cent to Rs 7,973.37 crore in the quarter under review as against Rs 7,570.78 crore in the year-ago period, the company said in a BSE filing today. HUL chairman Harish Manwani said: “In a subdued market environment, the business delivered another quarter of healthy volume-led growth and strong improvement in operating margin.” He further said: “With the near-term outlook largely dependent on pickup in rural markets and commodity costs expected to remain benign with little or no price growth across select categories, our focus will be to drive market development and simultaneously deliver cost efficiencies to sustain profitable volume-led growth.” The company’s CFO PB Balaji said the environment remains challenging and recovery is yet to stablise, especially in the rural market. Rural sales account for 35 percent of HUL’s total sales. During the quarter, HUL’s revenue from soaps and detergents grew by dismal 0.17 by percent to Rs 3,854.41 crore and of personal products by 11.39 percent to Rs 2,405.57 crore. Revenue from beverages grew by 9.36 percent to Rs 914.9 crore and packaged foods went up by 11.79 percent to Rs 607.94 crore. Overall expenses during the quarter stood at Rs 6,673.63 crore, as against Rs 6,466.52 crore in the year-ago period. However, HUL’s standalone net profit (Q-o-Q basis) rose over 4 percent to Rs 1,059.14 crore during the quarter as against Rs 1,018.08 crore in the same period last fiscal. HUL, which had to recall its Chinese range of Knorr instant noodles last month, said it will relaunch the product in the market after getting approval from the central food safety regulator FSSAI. HUL’s withdrew the product a day after reports that Hindustan Unilever’s Chinese range of ‘Knorr’ instant noodles may come under the scanner of Food Safety and Standards Authority of India (FSSAI) as the product was not in its approved list. The HUL scrip closed at Rs 891.45, down 2.34 percent on BSE. PTI