Unilever Pakistan posts impressive 19% sales growth 1st half 2006
The Company posted an impressive sales growth of 19% in the first half of 2006. Home & Personal Care and Ice-cream businesses showed strong growth of 36% and 45% respectively.
The key drivers for this growth have been consumer price stability, successful innovation roll outs, effective promotional activity and prominent merchandising.
The impressive growth in sales revenue, however, did not flow through to profit due to unusually high cost of tea leaf on account of severe drought conditions in Kenya, a problem faced by the tea industry worldwide. The Company has absorbed a large part of these higher tea costs. Secondly, the Company pursued a deliberate strategy to step up investment in building brand equity to sustain future sales growth.
Home & Personal Care
Sales for the first half year are up 36%. Surf, Lux, Lifebuoy, Fair & Lovely and Sunsilk have driven this strong growth and consequently enhanced our market shares.
Greater sales volume, improved sales mix combined with an aggressive cost savings programme have provided the funds to invest behind the brands.
There have been mega market activations like Surf Excel Games Masti & Lifebuoy Germ Busters, successful innovations with Sunsilk’s new range and the Fair & Lovely multivitamin launch, recapturing the beauty soap segment by Lux and increased consumer off take in Lifebuoy.
Beverages
While Beverages sales are marginally lower than last year, Lipton continues to deliver double digit growth. Brooke Bond Supreme however showed a decline in sales, due to the increasing number of small, lower priced regional brands in the Punjab.
Kenyan tea prices remained 40% above 2005 levels and this situation is expected to continue throughout 2006. High costs have led to increase in consumer prices.
Ice Cream
Ice Cream business delivered 45% sales growth through continued focus on exciting innovations and a significant increase in the number of Wall’s freezer cabinets.
Dividends and earnings per share
An interim dividend of Rs.65 per ordinary share has been recommended, representing over 97% of the earning per share, which is Rs. 66.76. [1st Half 2005: Interim Dividend Rs. 60 per share: EPS 65.47)
Summary of financial performance
