In the fourth quarter, HUL spent Rs656 crore on advertising and promotions. However, its net profit (excluding a one-time gain) increased by just Rs46 crore and its sales went up only by 8%, compared to the year-ago period
Hindustan Unilever Ltd (HUL), the unit of Anglo-Dutch Unilever PLC, spent Rs656 crore on advertising and promotions, however its fourth quarter net profit increased just by Rs46 crore, excluding a one-time gain. Even after including the one-time gain of Rs143 crore, HUL’s net profit of Rs581 crore is much less than its ad-spend. In short, after spending Rs656 crore on ads, the company could manage to earn a ‘pure’ net profit of just Rs438 crore compared with Rs395 crore, reported during the same quarter last year.
For the quarter to end-March, the company said its net profit rose 47% on a one-time gain while net sales increased 8%. However, on a consolidated basis, HUL's net profit fell 14% as sales declined 13% to Rs17,764 crore.
During the quarter, the company reported a net profit of Rs581 crore compared with Rs395 crore, in the same period last year, due to a one-time gain of Rs143 crore related to sale of property, long-term trade investments and lower provisions for retirement benefits.
“In an environment of heightened competitive intensity we have accelerated volume growth, ahead of the market. Broad-based actions have been taken to enhance competitiveness of our brands, build new segments, expand offerings in foods and improve the overall quality of our innovations and speed to market. These initiatives have started to yield positive results,” said Harish Manwani, chairman, HUL, in a release.
The company said during the quarter, domestic consumer and fast moving consumer goods (FMCG) business grew 8%, driven by strong 11% volume growth. Growth was broad-based across home and personal care (HPC) and foods and in aggregate, ahead of reported market growth. Although the company reported total revenues of Rs4,380 crore compared with Rs4,057 crore for the March quarter, on a consolidated basis, its total revenues fell 14%. On a consolidated basis, HUL's total revenues fell to Rs17,764 crore from Rs20,891 crore, a year ago.
During the quarter, HUL’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins declined 147 basis points on the account of 39%, 28.3% and 10.5% increase in ad-spend, purchase of finished goods and raw material consumption, respectively.
Despite spending Rs656 crore in the March quarter on advertising and promotions compared with Rs450 crore in the same quarter last year, HUL's net sales increased by just 8%, supported by personal care products, beverages and exports. Its soaps and detergents segment declined 2% to Rs1,978 crore from Rs2,016 crore from the year-ago period.
In the fourth quarter, HUL spent Rs206 crore more on advertising and promotions; however, its ‘pure’ net profit (excluding the one-time gain) increased by just Rs46 crore.
For the year to end-March, the company declared a final dividend of Rs3.5 per share, taking its total dividend to Rs6.5 per share, compared with Rs6 per share last year.
HUL shares ended Tuesday 0.6% down at Rs230 on the Bombay Stock Exchange, while the benchmark Sensex closed 2.7% down at 16,022 points.
MMRDA had set a reserve price of Rs50,000 per sq metre (for a minimum price of Rs1,980 crore) for the property. The plot, situated at Wadala in central Mumbai, has a permissible built-up area of 4,95,000 sq ft and 14 top property developers were in the fray
The MMRDA (Mumbai Metropolitan Region Development Authority) today auctioned a 25,000 sq metre commercial plot at the Wadala Truck Terminal (WTT). The Lodha Group won the bid at Rs5,723 crore. The developer will pay 10% of this amount upfront and the balance will be paid over five years at an interest rate of 10%. The plot has a permissible built-up area of 4,95,000 sq metre and the developer is allowed 19.8 FSI on the plot of land. It will be given out on a 65-year lease.
“Lodha Developers won the deal at Rs5,723 crore with interest. We are also granting 19.8 FSI to the developer,” said SVR Srinivas, additional metropolitan commissioner, MMRDA.
MMRDA had set a reserve price of Rs50,000 per sq metre and was seeking a minimum price of Rs1,980 crore for the property. It was finally sold at Rs81,818 per sq metre. There were 14 bidders in the fray: Sheth Infrastructure Ltd, Shriram Urban Infra Ltd, DB Realty, Reliance Infra, Bhakti Realty, Indiabulls, Parinee Developers, Godrej Pvt Ltd, Ackruti Ltd, Sunteck Realty, Gaurhati Estate, Lodha Crown, Raheja Universal and Acne Housing. Out of these bidders, apparently only four turned up for the auction. Sources told Moneylife that Sunteck had bid Rs70,002 per sq metre and Indiabulls had bid Rs67,222 per sq metre.
“It is too high a price that the developer has paid for this land. However, the winner has got more built-up area to construct and the location of the land is not in a crowded place and hence construction with high FSI can easily come up,” said Pankaj Kapoor, founder, Liases Foras.
Moneylife had earlier reported (http://www.moneylife.in/article/8/3991.html) on how MMRDA had failed to attract bidders for a prime commercial real-estate property deal in the Bandra-Kurla Complex (BKC) due to the high price quoted by it. There were around eight prospective bidders—including developers and banks—in the fray.
Currently, residential prices of properties in Wadala are around Rs8,000 per sq ft-Rs12,000 per sq ft.
Marico Ltd said its unit Kaya Ltd bought the aesthetics business of the Singapore-based Derma Rx Asia Pacific Pte Ltd. No price details were provided.
Kaya delivers skin care solutions in India and overseas through its range of Kaya Skin Clinics. Derma Rx, led by one of Singapore eminent aesthetic physicians, Dr SK Tan, has three centres in Singapore and one in Kuala Lumpur.
The acquisition would provide Kaya access to an advanced range of skin care products and a strong sourcing network, including suppliers of products from developed nations. It would also enable Kaya to increase its share of revenue, from sale of products, to over 20% from the current level of about 13%.
On Tuesday Marico shares ended 4.33% down at Rs100.45 on the Bombay Stock Exchange, while the benchmark Sensex closed 2.71% down at 16,022.48 points.