Unilever 1st Half Net Profit Rose Despite Pandemic Hit; Part of Tea Business to Be Kept -- Update
--Unilever's first-half net profit rose to EUR3.28 billion,
despite pandemic hurting non-hygiene and food businesses.
--Second-quarter turnover came in at EUR13.30 billion and beat
the EUR12.55 billion market consensus, thanks to household
stockpiling in March in the U.S. and Western Europe.
--Following a review of its tea business, Unilever has decided
to keep a part it, namely in India and Indonesia, as well as
partnership interests in the ready-to-drink tea joint ventures.
By Matteo Castia
Unilever PLC reported Thursday a rise in net profit for the
first half despite the coronavirus headwind and said it will keep
part of its tea business.
The Anglo-Dutch multisector retailer--which owns consumer brands
such as Ben & Jerry's ice cream and Dove soap--made a net
profit for the six months of 3.28 billion euros ($3.80 billion),
compared with EUR3.01 billion in the year-earlier period.
"In North America and parts of Europe there was a positive
impact from household stocking in March. Consumption patterns then
normalized in the second quarter with heightened levels of demand
for hygiene and in-home food products," the company said.
Turnover for the period decreased 1.6% on year at current rates
to EUR25.71 billion, slowed by significant drops in the food
service, out-of-home ice-cream, and non-hygiene personal-care
products. Underlying sales fell 0.1% on year, below its multiyear
target of 3% to 5% growth.
Still, the result came in stronger than the market consensus of
a 4.3% decline. Analysts at European investment bank Bryan Garnier
had forecast a 4.7% drop.
Second-quarter turnover came in at EUR13.30 billion, beating a
market consensus compiled on FactSet of EUR12.55 billion.
In December and January, the company warned that it would miss
its underlying sales growth target for the first half. At that
time, it said it expected sales to be second-half weighted and at
the bottom end of consensus for the full year.
In April, Unilever said the hit from Covid-19 lockdowns in big
emerging markets such as China and India was outweighing
stockpiling by consumers in the U.S., and it warned the crisis
could cause long-term changes in consumer behavior and demand
The board declared Thursday an interim dividend for the second
quarter of EUR0.4104.
Following on its announcement in January that it would review
its tea business--which includes brands such as Lipton, Brooke Bond
and PG Tips--the company said Thursday that it will keep part of
"This review has assessed a full range of options. We will
retain the tea businesses in India and Indonesia and the
partnership interests in the ready-to-drink tea joint ventures,"
Write to Matteo Castia at firstname.lastname@example.org
(END) Dow Jones Newswires
July 23, 2020 03:49 ET (07:49 GMT)
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