HUL Q4 net falls 3% in block

TNN

Mumbai: Even the brief start to what was induced within FY20 made a dent Hindustan Unilever ’S ( HUL March quarter performance with a net gain of around 3% and underlying volume growth slowed by 7%.

The ( FMCG ) major reported a consolidated net profit of Rs 1,520 million in the quarter ended March 31, 2020, while product sales decreased 9.6% to Rs 9,055 million. Sales of her ice cream business outside the home and beauty and cosmetics business stopped since mid-March.

The only other time when HUL reported a decline in volume growth in recent years was during demonetisation (December quarter) when it was negative 4%. Given that the March quarter witnessed only the early period of the lockdown, industry analysts feel the company’s June quarter performance may not be any better.

HUL CMD Sanjiv Mehta said operations are currently running at 75-80% of normative levels and manufacturing is mainly for essential health, hygiene and home care products. Mehta said it is difficult to predict how things will pan out after May 3. During the quarter, while beauty&personalcaresalesweredownbyabout14%,homecarewitnesseda4%declineinrevenuesandfood&refreshmentsweredownbyabout7%.

however,unlikeotherfirms,hulincreaseditsexpensesonadvertisingandpromotionmarginallytors1,175croretoremaincompetitive.hulcfosrinivasphataksaid,“thedisruptioninsuppliesfollowinghasimpactedourperformance.whilethemacroeconomiccontextwaschallengingevenbeforecovid,therehasbeenagreaterdecelerationindiscretionaryspends,resultingintheoverallfmcgmarketgrowthfallingbelow2%.yet,ourperformancehasbeencompetitiveandwehavegainedaquarterlymarketshareof50basispoints(100bps=1percentagepoint)atacorporatelevel.”

thecompanysaiditisreevaluatingallcoststocontinueinvestinginthebestopportunities.butmehtasaidthatasofnow,thecompanyhasnotlostanyjobsorcutwages.however,headded:“wecouldnotsaywhatisgoingtohappeninthefuture.wewillseethesituationasitevolves,”hesaid.

phataksaidthecompany'soverallperformancethroughoutthefiscalyearhasbeenresilientandcompetitivewithstrongcashgenerationreflectingthestrengthofourbrandportfolioandbalancesheet.

forfiscalyear20,domesticconsumergrowthwas2%withunderlyingvolumegrowthof2%.profitaftertaxatrs6.738croreincreasedby12%.theboardofdirectorshasproposedafinaldividendofrs14pershare.givenitsstrongpositionincashflows,thecompanyissupportingdistributorswithcreditforafewdays,whilebeingjudiciousabouthowitwilldeploycredittomaintaincontinuityofsupply.

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