Unilever H1 Profit Down, Revenues Strong; Stock Up

(RTTNews) - Anglo-Dutch consumer goods giant Unilever (UN, UL, ULVR.L) Thursday reported lower profit in its first half, reflecting the absence of prior year's disposal profits. Revenues, however, climbed with higher volume and prices, as well as strong underlying performance in emerging markets.

Looking ahead, Chief Executive Officer Paul Polman stated that the company plans for another year of volume growth ahead of its markets, steady improvement in core operating margin and strong cash flow. Unilever shares were gaining in the early morning trading in Amsterdam and London.

For the first half, net profit attributable to shareholders' equity declined 12 percent to 2.49 billion euros from last year's 2.82 billion euros. Earnings per share dropped 10 percent to 0.87 euros.

The company attributed the decline in profit to the 1.4 billion euros profit on disposals in 2014, primarily related to the disposal of Ragu and Bertolli pasta sauces brands in the United States.

Core attributable profit totaled 2.60 billion euros, or 0.91 euros per share, versus 2.28 billion euros, or 0.78 euros per share, reported a year ago.

Operating profit declined 13 percent, while core operating profit went up 16 percent, and core operating margin improved 50 basis points to 14.5 percent.

Turnover for the six-month period increased 12 percent to 26.99 billion euros from 24.10 billion euros a year ago, including a positive currency impact of 10 percent. Underlying sales growth was 2.9 percent with volume up 1.1 percent and price increase of 1.7 percent.

The company pointed out that consumer demand remains weak and volumes are flat in its operating markets. Emerging markets continue to be subdued whilst in Europe and North America growth is negligible.

Underlying sales growth in Emerging markets was 6 percent with volume increase of 1.9 percent and price growth of 4 percent. The company said it held volumes in developed markets as pricing continued to decline in Europe.

In its second quarter, the company's turnover was 14.2 billion euros, representing underlying sales growth 2.9 percent with underlying volume growth 1.3 percent and price up 1.5 percent. Sales growth in Asia and Americas were partly offset by weak results in Europe. Developed markets' sales declined 1.8 percent on an underlying basis, while emerging markets' sales grew 6.5 percent.

The Boards declared a quarterly interim dividend for the second quarter of 0.3020 euros per Unilever N.V. ordinary share, and 0.2110 pounds per Unilever PLC ordinary share. The dividend will be paid on September 9 to the shareholders of record on August 7.

Unilever shares were gaining 2.8 percent in the early morning trading in Amsterdam at 41.90 euros, and up 3.15 percent in London at 2,949 pence.