Unilever Consumer Care’s profit grows 15pc on reduced cost
One-off waiver of technology and trademark royalty granted by the parent company also supported the growth
FE REPORT | Thursday, 1 August 2024
Despite a decline in revenue, Unilever Consumer Care registered a 15 per cent year-on-year growth in profit to Tk 189.49 million in April-June (Q2) this year, backed by operating efficiency and an increase in net finance income.
The one-off waiver of technology and trademark royalty granted by the parent company also supported the growth.
The same factors also helped the company to experience a 13 per cent year-on-year growth in profit to Tk 413.30 million in January-June (H1) this year amid a 10 per cent year-on-year decline in revenue during the same period.
The company's revenue comes from sales of health food drink Horlicks and glucose powder, which decreased 6.58 per cent in Q2 this year, compared to the same quarter of the previous year.
But the year-on-year operating costs went down 25 per cent to Tk 156.05 million in the second quarter to June, riding on operating efficiency that reduced operating expenses.
The company experienced a 30 per cent year-on-year decline in operating expenses in H1 this year.
Preferring anonymity, a senior official of Unilever Consumer Care said operating expenses had fallen as the company reduced overhead costs in the areas that added no value to the operations.
A 17 per cent year-on-year increase in net finance income was another reason behind the profit growth experienced in the second quarter.
The company official said the increase in net finance income was supported by a rise in FDR (fixed deposit receipt).
According to the financial statements, the company paid a technology and trademark royalty worth Tk 105.09 million for January-June, 2023.
But because of a waiver, the company paid no royalty for January-June this year, which ultimately boosted the profit.