Karachi: In its meeting held today, the 9th of August 2011 at 10:30 Hrs at Karachi, our Board of Directors has approved the Condensed Interim Financial Information of the Company for the half Year ended June 30, 2011.
After-tax earnings increased by 29%. Turnover grew 15.3%. Both were constrained by a number of factors. Smuggling of tea continued to affect volume and margin, power outages impacted distribution of ice cream, whilst pressure on disposable incomes slowed category growth, Offsetting positives were strong portfolio of brands augmented by five new entries, improvement in mix and more effective distribution. Input cost continued to increase on the back of rising commodity costs, margins, however, benefited from improved scale and timely but measured price corrections, preserving consumer value. The latter was supported by continued focus on product quality, bigger, better and faster innovation and competitive pricing. Profit after tax also benefited from lower financial charge stemming from further optimization of working capital.
Home and Personal Care (HPC)
HPC grew by 18% as a result of new offerings and consumer relevant innovations in core. Surf continues to consolidate its position as a value market leader despite stiff competition. Strong brand equity of popular brands – Lux, Rin, Fair and Lovely and Ponds, helped drive volume growth even as input cost inflation was offset though price increases. Strong media campaigns (Tools for Schools-Surf, Time to Shine-Rin, Purple Variant- Lux, Fairness Meter- Fair and Lovely, etc) strengthened market share despite the competitive heat.
Five new brands and formats were launched in the first half of the year. Sunlight Washing Power, Dove Shampoo, Dove Soap, Vim Dishwash Liquid and Bars till portfolio gaps and position the business for higher share of customer shelf and consumer wallet.
The formal Tea industry and our business continue to suffer from an uneven playing field. Pakistani consumers pay 50% more than the price in rest of South Asia, due mainly to high government levies which we are lobbying to reduce. Tea is accorded an essential foods status and taxed at 4% in India; Pakistani consumers bear 16% GST and 10% import duty. High government levies create incentive to evade. Porous borders make it easy. Consequently more than half tea consumed in the country is smuggled. Lower government levies will discourage smuggling, bring all imports into the official net and neutralise impact on government revenue. Smuggled tea is often adulterated with harmful substances. Discouraging smuggling will have a positive impact on quality of tea consumed.
The successful ‘Sip of inspiration’ campaign further strengthened Lipton’s brand equity, Supreme’s “Tandrust Rahein, Mast Rahein” campaign continues to deliver positive results.
Ice Cream top line grew by 20% Greater focus on managing costs, a better product mix and selective pricing actions helped improve gross margins. Innovation continues to be at the heart of the category’s strategy. Special focus was directed towards launching value added offering tailored to local taste palate. These included Fruttare, Peshawari Crunch, Badami tubs, Pista Badami and ‘Zapper’ which were well received by consumers.
Spreads delivered an impressive volume led sales growth of 41% thorough penetration into new towns. Door to door sales and the “Growth meter II” campaign. We continue to drive availability and visibility through the deployment of visi-coolers at retail outlets.
Condensed Financial Information
Half Year Ended
(Rupees in millions)
|Less: Cost of sales||(8,332)||(7,604)||(16,453)||(14,692)|
|Less: Distribution costs||(2,985)||(2,230)||(5,308)||(4,275)|
|Less: Administrative expenses||(395)||(323)||(724)||(581)|
|Less: Other Operating expenses||(87)||(76)||(190)||(148)|
|Less: Restructuring cost||(25)||(50)||(45)||(50)|
|Add: Other operating income||132||60||228||110|
|Profit from operations||941||926||2,311||1,868|
|Profit before taxation||914||901||2,264||1,797|
|Profit after taxation||633||605||1,532||1,187|
|Earnings per share-basic and|
In view of the financial results for the half year January to June 2011, the Directors have recommended an Interim Dividend of Rs. 105/- or 210% per ordinary shares of Rs. 50/- (half year January to June 2010, Rs 89/- or 178% per ordinary share). This will be payable to Members on the number of ordinary shares held by them at the close of business on 05 September 2011.
Closure of Share Transfer Books
The Share Transfer Books of the Company will be closed from 30 August 2011 to 05 September 2011 (both days inclusive), and will re-open on 06 September 2011. Transfer in good order, received at the Company’s Share Registration Office c/o Famco Associates (Private) Limited, State Life Building No. 1-A, I.I. Chundrigar Road, Karachi, by the close of business on 29 August 2011 will be treated in time for the purpose of payment of Interim Dividend to the transferees,
For more information, contact:
Unilever Pakistan Limited
Fatima Jinnah Road,