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HLL net rises 28 per cent to Rs 3.28 billion in H1

Hindustan Lever Limited has posted an increase of 28.2 per cent in its net profit at Rs 3.28 billion in the first six-month period of 1998 as compared to the same period last year.

The net sales have grown by 19.8 per cent to Rs 46.62 billion, in the half-year ending June 30, as compared to Rs 38.91 billion in the first half of 1997. HLL introduced 38 product innovations, of which 20 were new launches and 18 relaunches of existing products. They followed the 64 innovations in 1997.

Profit before taxation at Rs 4.5 billion has grown by 26.9 per cent over the first half of last year (Rs 3.55 billion), while profit after taxation, before exceptional items, has increased by 31.7 per cent to Rs 3.29 billion (Rs 2.5 billion).

The annualised earning per share works out to Rs 33.00 (1997 first half: Rs 25.74). The HLL board today announced an interim dividend of Rs 9.60 per share, an increase of 28 per cent over last year's interim of Rs 7.50 per share.

Addressing a press conference in Bombay, HLL Chairman Keki B Dadiseth said the company registered strong volume and profit growth, despite difficult market conditions, by delivering value-for-money products at affordable prices.

This was achieved through product innovation, low-unit price packs, supply chain initiatives and low-cost manufacturing technologies, he said and added that excellent financial management resulted in a handsome increase in treasury income to Rs 594 million (Rs 274 million).

In exports, the group's turnover was Rs 9.24 billion, a record growth of 80 per cent in rupee terms, compared to the country's exports growth of less than 10 per cent.

HLL has commissioned six new factories, including an export-dedicated sealed tea bag plant at Pune, a soap and a personal products factory at Pondicherry, a detergent and a speciality chemicals unit at Daman and a tea factory at Silvassa.

It also acquired Lakme Limited's 50 per cent equity in Lakme-Lever Limited, now a wholly owned subsidiary and also the Lakme trademarks. The net cash outflow has been about Rs 1.30 billion, with HLL's 5 per cent optionally fully convertible debentures in Lakme Brands Limited being redeemed at par for Rs 700 million. HLL is separately paying Rs 288 million for Lakme Limited's factories in Bombay and Kandla, for which statutory approvals are awaited.

On future prospects, Dadiseth said, all depend on investment and growth of the Indian economy. He said the timely and normal rainfall so far should augur well for agriculture and rural demand, supplemented by the substantial increase in government expenditure on rural development and employment generation.

HLL expects rural demand to sustain growth in the second half. But the newly introduced excise and customs duty, 5 per cent ModVat restriction and the rupee depreciation have led to cost increases and price revisions, which may have an impact on overall market growth and product offtake.

UNI