The profit after tax of Unilever Pakistan Limited has declined to Rs 862 million in the first half of the current year (January-June 2007) as compared to Rs 883 million in the same period last year. The basic earning per share of the company stood at Rs 64.85 in the period under review against Rs 66.40 in the same period last year.
The board of directors of the company, in its meeting held on Thursday, recommended an interim dividend of Rs 60 per ordinary share of Rs 50. Chief Financial Officer (CFO) of the company Peter Harvey, briefing the media regarding the company's financial results, said that the net sale stood at Rs 11,595 million in this period as compared to Rs 10,354 million in the same period last year.
He said that the turnover growth for the second quarter of 2007 was 12 percent. "Markets remain extremely competitive requiring strong and sustained investment behind our brands, resulting in higher marketing and advertising costs and lower post tax profits", he added.
According to him, the unprecedented price hike in key raw materials' cost, especially in soap oils and dairy products, was putting tremendous pressure on margins. This, coupled with the recent one percent Federal Excise Duty on virtually all products, would be difficult to recover in the short term. Severe weather and at times, uncertain market conditions were having an impact on the business performance.
"In key categories of home & personal care products, we have grown or held market share, delivering 21 percent turnover growth", he said, and added this was attributed to higher volumes of Lux, Surf Excel and Sunsilk.
The sales of beverages grew by two percent and the company held market share. "Lipton continues to grow through effective on-ground activities and consumer promotions such as "Tea Bag Mug" offer. Tea leaf prices have continued to fall from the peak of 2006 and the company has reduced consumer prices. With restored margins, the company is able to increase advertising behind Brooke Bond Supreme," he said.
He said that the ice cream sales in the second quarter was restricted by delays in the factory capacity upgradation (now full completed) and an early start to the monsoon season combined with acute power load shedding in Karachi.