23rd Jul 2020 09:02
(Alliance News) - Consumer goods company Unilever PLC on Thursday reported a 4.1% rise in first-half profit and said that it saw a double-digit sales growth in hygiene products due to the Covid-19 pandemic, which help offset decline in sales of food service and out of home ice cream sales.
Unilever traditionally relies in particular on purchases of its ice cream brands such as Magnum and Ben & Jerry's during summer months.
Shares in the Anglo-Dutch company were up 7.1% at 4,636.00 pence each in London, the best performer in the FTSE 100 index on Thursday morning.
The maker of Dove soap and Domestos household cleaner said it increased its hand sanitiser capacity by 600 times across several brands and rolled out its Lifebuoy hygiene brand to more than 50 markets.
In addition, Unilever said that it has decided to form a separate entity for its tea business, which generated revenue of EUR2 billion in 2019.
The company, which announced a strategic review of its tea business in January, however intends to retain its tea businesses in India and Indonesia and the partnership interests in the ready-to-drink tea joint ventures.
"The balance of Unilever's tea brands and geographies and all tea estates have an exciting future, and this potential can best be achieved as a separate entity. A process will now begin to implement the separation, which is expected to conclude by the end of 2021," the company said.
For the half-year ended June 30, revenue was EUR25.71 billion, down 1.6% from EUR26.13 billion the year before, but pretax profit rose 4.1% to EUR4.53 billion from EUR4.35 billion.
Underlying sales for the period declined 0.1% with volumes declining 0.3% but prices rising 0.2%. Developed markets grew 2.4%, whilst emerging markets declined 1.9%.
First-half underlying sales of Beauty & Personal Care division declined 0.3%, with volume growth of 0.1% and negative pricing of 0.4%.
Home Care underlying sales grew 3.2%, with 2.9% from volume and positive pricing of 0.3%. The rise was attributed to increased consumer demand for household cleaning products, such as Cif surface cleaners.
Unilever maintained its quarterly shareholder dividend at EUR0.4104 per share.
"As people spent more time in their homes, we saw growth in home consumption of foods, ice cream and tea. It also meant that consumers had fewer personal care occasions from going to work or socialising, and we saw a decline in our personal care business, except for hygiene products. The effectiveness of good hygiene practices against the spread of Covid-19 increased demand for our hand and home hygiene products, which each grew double digits," Unilever said.
Chief Executive Officer Alan Jope said: "Our focus for the rest of 2020 will continue to be volume led competitive growth, absolute profit and cash delivery as this is the best way to maximise shareholder value."
By Tapan Panchal; [email protected]
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