HLL Q3 profit up at Rs. 399 cr.

By Our Staff Correspondent

MUMBAI, OCT. 16. Hindustan Lever (HLL) has announced a net profit of Rs. 399.16 crores for the quarter ended September 2001 against Rs. 331.16 crores in the corresponding period of the previous year.

Net sales during the period under review amounted to Rs. 2,635.22 crores (Rs. 2,461.9 crores) and other income Rs. 113.36 crores (Rs. 91.87 crores). After providing Rs. 2.54 crores (Rs. 3.21 crores) for interest, the gross profit amounted to Rs. 517.63 crores (Rs. 444.37 crores). The company provided Rs. 39.27 crores (Rs. 29.9 crores) for depreciation and Rs. 100.71 crores (Rs. 83.31 crores) for tax.

On a like to like basis, after netting off the impact of business transfers, the sales growth works out to 5.8 per cent for the quarter.

For the nine months ended September 2001, the net profit was Rs. 1,204.93 crores (Rs. 880.51 crores) on a net sales of Rs. 8,208.98 crores (Rs. 7,955.69 crores).

Mr. M. S. Banga, chairman, HLL, said, ``Market conditions continued to be very challenging with intense competition coupled with a slowdown and decline in several categories. In this situation, the company relentlessly pursued its strategy of growth through focus on its power brands. We have invested a significant amount (about Rs. 70 crores during the year) in upgrading the quality of our products, especially in personal wash to enhance competitiveness. Advertising support was stepped up by about 30 per cent in the current quarter, mainly on power brands."

This resulted in the growth rate of HLL's FMCG portfolio improving from 2.6 per cent in the March quarter and 3.2 per cent in June quarter to 10.5 per cent in the current quarter. The growth was led by several re-launches as well as appropriate consumer related activities. Cost management initiatives in the beverages and foods business and portfolio rationalisation of unviable products, even at the cost of some top-line growth, yielded a 470 basis point improvement in gross margin of which some has been reinvested.

Mr. Banga further said, ``Overall growth prospects for the coming quarters will depend on rural market growth, a clear picture on this will emerge only in coming months, as well as the impact of the recent global developments on the economy. The company will continue to follow its strategy of driving the growth of its power brands. We will also continue to invest a part of our profits from exceptional income during the year to strengthen the core business portfolio while ensuring that our shareholders continue to receive healthy returns."

Exports of HPC products registered a strong growth of 34 per cent while foods and beverages exports grew 1 per cent. Other exports declined by 17 per cent mainly due to a planned phasing out of unviable traded exports. The company is in an advanced stage of testing for its foray into the bottled water business which it feels is `very competitive'.

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