Unilever Pakistan has lately been delighting consumers with the launch of several new products in various categories. Last year, the Company had launched prominent brands such as Dove, Sunlight washing powder and various ice cream variants.
So far, this year has already seen some interesting products dot streets and superstore aisles in the country, such as the toilet cleaner Domex and Walls Fruity Yogurt ice-cream cone. In fact, the Companys result brief mentioned the advertising and promotion being spent on "nine more brands than the same period last year".
In the results for the first quarter this year released by the Company, no extraordinary improvement in either the top line or bottom line was witnessed.
Unilever Pakistans top line went up by 11 percent during 1QCY12 vis-à-vis the same period last year, with gross margin improving slightly by 0.7 percentage points relative to 1QCY11.
Distribution and advertising costs for the Company during the first quarter this year went up relative to the same period of the previous year. As a percentage of sales, distribution expenses increased to 20 percent in 1QCY12 as opposed to 19 percent in the same quarter of the last year.
Given that Unilever is primarily a marketing company, which has lately been bringing several new products and categories to the market, the increase in advertising and distribution expenses seems reasonable.
The operating profit during 1QCY12 did increase relative to the same period of the last year, but operating margins shrunk marginally by about 0.2 percentage points compared to the same quarter of 2011.
Overall, the Companys net profits improved by 16 percent during the quarter under review relative to 1QCY11, clocking in at nearly Rs.1 billion. The directors also announced an interim dividend of Rs.65 per share during the quarter.
Going forward, the coming quarters of the year will plausibly see greater growth in the Companys revenues. This is due to the summer season having commenced in the country, which will bring an associated increase in ice cream sales.
Also, with several of the new products advancing beyond the introductory phase in the months to come, sales are also likely to go up as more awareness and brand acceptance for these products build up.
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