Unilever’s profit jumps by 40% despite high raw material costs

Unilever Consumer Care, a subsidiary of Unilever Bangladesh that manufactures Horlicks and GlucoMax D, saw its profit jump by 40 per cent in the first nine months of this year compared to the same period of the last year.

The listed firm said that the cut in corporation tax gave a boost to the company’s earnings in the period.

Despite a significant increase in raw and packing materials costs, the earnings have improved due to an improvement in trade spending amounting to Tk 2 crore, efficiency in operating expenses amounting to Tk 10 crore, and a large one-off benefit amounting to Tk 40 crore coming out of reassessment of past liabilities and obligations in light of recent business development, the company said.

Their profit in the nine months (Jan-Sep’22) of 2022 stood at Tk 54.04 crore, a 40 per cent increase from Tk 38.67 crore for the same period of the previous year.

The multinational company’s earnings per share (EPS) was Tk 44.86 for the nine months of 2022, compared to Tk 32.10 for the same period last year.

In the last three months (Jul-Sep’22), the company's net profit stood at Tk 18.72 crore as against Tk 16.28 crore for the same period last year.

Its EPS stood at Tk 15.54, compared to Tk 13.52 for the same period last year.

Unilever’s company secretary, Mohammad Naharul Islam Molla, told The Business Post, "We are doing business well. If everything goes well in the coming days, we can offer a healthy dividend at the end of the year.”

“Our operational expenses were also lower compared to the previous year, which had a positive impact on the earnings," he also said.

The company’s net operating cash flow per share (NOCFPS) was Tk 16.99 for Jan-Sep'22 as against Tk 41.54 for the same period of the last year. Its net asset value (NAV) per share was Tk 123.74 as of September 30, 2022 and Tk 122.88 as of December 31, 2021.

According to Unilever, the NOCFPS has decreased by Tk 25.00, owing to a significant increase in raw and packing materials costs, as well as a significant increase in the foreign exchange rate, which has been partially offset by efficiency in overhead.

In the nine months, its revenue stood at Tk 320 crore, which was Tk 319 crore in the same period of the last year.

Unilever purchased an approximate 82 per cent stake in GlaxoSmithKline (GSK) Bangladesh, which has been listed on the bourses since 1976, from Setfirst in June 2020 for Tk 2,020.8 crore, making it the largest transaction by a single company on the Dhaka bourse.

Under the acquisition, Unilever got ownership of GSK’s iconic health food and drinks (HFD) portfolio brands, including Horlicks, Boost and Glaxose-D.

The acquisition, though, came under the scanner of the Bangladesh Securities and Exchange Commission five months later, which raised issues about GSK Bangladesh’s name change to Unilever Consumer Care, along with other matters.

This name change, which took place on November 29 last year, confused uninformed retail investors, who jumped to snap up shares of Unilever Consumer Care, sending its price soaring.

Horlicks, the company’s top-selling product, accounts for as much as 90 per cent of its total revenue income.

The company posted a revenue income of Tk 121.47 crore in the Q1 of the current year, versus Tk 114.43 crore in the same period last year.

The company’s gross profit stood at Tk 65.65 crore during that time, compared to the tally of Tk 63.64 crore in the first quarter of last year.

In Q1, the company’s net profit jumped by 40 per cent to Tk 105 crore on a year-on-year basis.

Unilever’s total revenue income went down by 25 per cent in April-June compared to January-March.

The company generated a revenue income of Tk 90.77 crore in Q2.

Horlicks sales stood at Tk 81.11 crore in Q2, while glucose sales totalled Tk 9.67 crore in the same period.

Each share of the company, which was listed on the Dhaka Stock Exchange in 1976, closed at Tk 2,849.10 on Wednesday.

In 2021, the company paid a 440 per cent cash dividend.