The Telegraph
Since 1st March, 1999
Email This PagePrint This Page
Lever profit rise fails to bring cheer

Mumbai Oct. 25: Hindustan Lever (HLL) shares plunged to a four-year low on a day the company announced second quarter numbers that turned out to be tamer than the market’s already trimmed-down estimates.

Post-tax profit for the third-quarter ended September was Rs 420 crore, up 11.2 per cent over the same time last year. Sales fell 7 per cent to Rs 2,367 crore. Other income was down Rs 8 crore because of lower interest rates. The results include a restructuring cost of Rs 10 crore against Rs 11.25 crore in July-September 2001.

The company’s stock shed 5.6 per cent to Rs 158.30 — the lowest since December 1998 — in a decline that took the total losses suffered in 2002 to 30 per cent. Later, it recovered to end at Rs 161.50, but was still one of the scrips that sent the BSE sensex sliding 32.52 points to 2875.53.

Commenting on the performance, chairman M. S. Banga said: “Our home and personal care power brands have grown at the rate of 6.8 per cent despite the slump. Lifebuoy, Lux, Wheel, Fair & Lovely, Ponds, Pears and Lakme recorded double digit growth.”

Rajesh Kothari of Khandwala Securities blamed falling sales of staple foods and tea for the decline in turnover. “The biggest positive was the growth in the operating margins to 15.2 per cent compared with 19.5 per cent. Its cost-cutting drive has been successful, especially after sale of some of its businesses,” Kothari said.

The company said it had booked a loss of Rs 6.84 crore from the sale of its mushrooms business this year, and stopped traded exports — of goods it does not produce itself. Excluding that, exports grew 2.5 per cent.

What was heartening was that Power Brands bucked the trend and actually grew in the three months ended September. Soaps and detergents grew 2.8 per cent, led by a 11.1 per cent rise in sales of personal wash items.

The beverages business improved in profitability, with gross margins improved 3.5 per cent. However, sales continue to be under pressure due to low commodity prices and intense competition from local players.

Oil sales were flat, while things began warming up for ice-creams, where gross margins improved 16 per cent.

The company divested the Mushroom Exports business to a subsidiary. The disposal loss of Rs.6.84 crore — the difference between the book value of assets and their real worth —has been reflected as an exceptional item.

Glaxo Q3 net dips

GlaxoSmithKline Consumer Healthcare Ltd has posted a lower net profit at Rs 24.03 crore in its third quarter ended September 30 2002, compared with Rs 27.4 crore a year ago.

Total income (net of excise) in the period under review increased to Rs 235.4 crore from Rs 232.92 crore in the third quarter last year, the company informed the BSE today.

Email This PagePrint This Page