Lower Horlicks sales, yet Unilever profit rises 17%

Sales of Horlicks – the most popular health food drink product in the country – dropped in the first quarter of this year owing to high inflation, but the company's profit rose by 16.66%, riding on increased financial income and reduced operating expenses.

In the January-March quarter, the multinational company's net profit increased to Tk20.13 crore from Tk17.26 crore in the same period of the previous year. Its revenue declined by 10% during the same period.

The company's operating expense was Tk23.30 crore in the first quarter this year – 23% less than Tk30.42 crore during the same period a year ago.

Its net financial income stood at Tk4.13 crore in the first three months of 2023, which was Tk0.45 crore a year ago.

Unilever Consumer Care Chairman Masud Khan told TBS, Horlicks was not prioritized over essentials like rice, eggs, milk by the inflation-hit consumers and also the price increase of Tk2 per Tk10 small packs slowed down the sales.

However, the company reduced its operating expenses through sharing some resources with its sister concern Unilever Bangladesh. 

Its financial income increased as the company's global parent allowed it to deposit its cash in stable local banks that offer higher interest than the foreign banks and parking idle cash in treasury bills might come sooner for even higher financial income, said Khan.

The company earned Tk108.52 crore revenue during the period, which is 10.66% lower from 2022.

Sales of nutritional drink Horlicks decreased by 13% to Tk91.48 crore during the first quarter of this year from Tk105.25 crore in the same period of the previous year.

Sales of GlucoMax D, a glucose brand of the company, increased by 5% to Tk17.03 crore in the first three months of this year compared to the same time previous year.

The company has produced 13.87 lakh tonnes health food drinks and 57 lakh tonnes glucose powder during the period, according to the quarterly statements.

In its quarterly statement, Unilever Consumer Care said despite a significant increase in raw and packing material costs, earnings per share shows an improvement mainly due to efficiency in operating expenses, increased finance income as well as one-off benefits coming out of the assessment of past liabilities and obligations in the light of current business development.

Besides, the effective tax rate has been reduced compared to 2022 due to the lower corporate income tax rate.

The increase in net asset value per share resulted from improved profitability of the company.

The decrease in net operating cash flow per share is mainly due to a significant increase in raw and packing material prices along with a significant increase in foreign exchange rate partly offset by efficiency in operating expense, said the company.

The company's quarterly earnings per share stood at Tk14.33 while the net asset value per share was Tk156.31 at the end of March.

On Tuesday, the share price of Unilever Consumer Care decreased by 2.75% to Tk2027.40 on the Dhaka Stock Exchange.

As of 30 April 2023, sponsors and directors hold 86.04%, institutions 9.42%, foreign investors 0.29%, and general investors 4.25% shares of the company.