Hindustan Unilever (HUL) has reported a 23.43 per cent decline in standalone net profit at Rs 1,019.25 crore for the first quarter ended June 30, on account of an exceptional income generated in the same quarter last year from the sale of properties.
The FMCG major had posted a standalone net profit of Rs 1,331.19 crore in the corresponding quarter a year ago.
In a filing to the Bombay Stock Exchange, HUL said its net sales went up by 6.99 per cent to Rs 6,687.49 crore in the quarter under review as against Rs 6,250.15 crore in the corresponding quarter last year.
During the quarter, revenue from soap and detergents increased by 7.33 per cent to Rs 3,407.66 crore, personal products increased by 1.96 per cent to Rs 1,883.38 crore. Revenue from beverages grew by 15.79 per cent to Rs 757.37 crore and packaged food increased by 4.78 per cent to Rs 457.88 crore.
Explaining the reasons for the decline in net profit, the FMCG company said in the year-ago quarter it had an income of Rs 607.24 crore from exceptional items, which included sale of properties.
For the same quarter this year, the credit from exceptional items was at Rs 106.25 crore.
Defending the company's performance, HUL Chairman Harish Manwani said: "In a difficult market environment, we have again delivered competitive growth and strong margin expansion through a sustained focus on innovation, in-market execution and robust cost management."
He, however, said that there are near-term concerns due to slowing market.
"While there are near-term concerns particularly around slowing market growth, we are confident of the medium- to long-term growth prospects of the FMCG sector and our strategy of driving growth and profitability through innovation and operational excellence," he added.
HUL Chief Financial Officer R Sridhar said the discretionary products are under pressure. "Fair & Lovely sales declined in the quarter but there are clear plans to accelerate growth momentum for Fair & Lovely."
Total expenses were at Rs 5,789.88 crore, an increase of 5.84 per cent compared with Rs 5469.95 crore last year. HUL's advertising and promotions expenses in the quarter increased by 8.56 per cent to Rs 889.78 crore.
During the first quarter, parent company Unilever PLC increased its stake in HUL to 67.28 per cent from 52.48 per cent, following an open offer which commenced on June 21.
Shares of the company shed 3.38 per cent on BSE to close the day's trade at Rs 663.30.