FMCG major Hindustan Unilever on Thursday reported a decline of 3.93 per cent in consolidated profit to Rs 1,512 crore for the fourth quarter, impacted by the coronavirus crisis from mid-March.
The company had posted a net profit of Rs 1,574 crore in the January-March period of the previous fiscal.
Sales during the quarter under review stood at Rs 9,055 crore, down 9.61 per cent from Rs 10,018 crore in the corresponding period a year ago, Hindustan Unilever Ltd (HUL) said in a regulatory filing.
"The spread of COVID-19 impacted the business from mid-March, which culminated into scaling down of operations post the national lockdown. Domestic Consumer Growth declined by 9 per cent with a decline of 7 per cent in underlying volume growth. Reported EBITDA margin reduced by 40 bps," said HUL.
However, the company said its "performance has been competitive with corporate market share gains" in this challenging economic context.
HUL's total expenses were at Rs 7,412 crore as against Rs 7,958 crore, down 6.86 per cent.
HUL CMD Sanjiv Mehta said the COVID-19 pandemic hit the FMCG market hard and the sector was already decelerating before the outbreak of the disease.
"Just before the outbreak of COVID-19 we had a scenario where the markets were slowing down...The decrease of market growth was more accentuated in rural than urban and that was the scenario when COVID-19 picked up," he said while addressing a media concall.
While the health crisis had its implications in February, the immediate impact in March was predominantly on the supply line when supplies got disrupted and then later on when the national lockdown happened it impacted demand, he added.
Mehta said HUL's sales volume decline in the fourth quarter was the first since demonetisation in 2016.
Terming COVID-19 as "perhaps the biggest challenge for us both from the lens of sustaining lives as well as livelihoods", he said, "The human impact of the pandemic is uncertain, and we are fully committed to working with the government and our partners to ensure that we overcome this crisis together." HUL's revenue from the home care segment during the quarter under review stood at Rs 3,350 crore, down 4.34 per cent compared to Rs 3,502 crore in the corresponding period a year ago.
Beauty and personal care segment dipped 13.49 per cent to Rs 3,834 crore from Rs 4,432 crore earlier.
Contribution from foods and refreshment segment was also down 6.68 per cent to Rs 1,788 crore from Rs 1,916 crore in the fourth quarter of 2018-19.
Revenue from the 'others' segment, which includes exports, infant and feminine care, dropped 31.90 per cent to Rs 239 crore, as against Rs 351 crore.
However, for the fiscal year 2019-20, HUL's net profit rose 11.48 per cent to Rs 6,756 crore, compared to Rs 6,060 crore in the previous year.
Sales for the full fiscal stood at Rs 39,136 crore, marginally up 1.44 per cent from Rs 38,579 crore in 2018-19.
"For FY 2019-20, Domestic Consumer Growth was 2 per cent with Underlying Volume Growth of 2 per cent," said HUL, adding, "We sustained our track record of strong cash generation." HUL further said it has a strong balance sheet and cash position.
"However, we are systematically reviewing all areas of cash generation and usage and re-evaluating all costs in the prevailing circumstances, so that we can continue to invest towards the best opportunities," it said.
Meanwhile, the company proposed a final dividend of Rs 14 per share, subject to the approval of the shareholders at the AGM.
"Together with the interim dividend of Rs. 11 per share, the total dividend for the financial year ending 31st March 2020 amounts to Rs. 25 per share; an increase of 14 per cent," said HUL.
HUL, which has completed merger of GSK Consumer Healthcare business in India and paid Rs 3,045 crore to get iconic brands such as Horlicks and Boost, said it would enhance the company's play in the health drink segment.
"With the GSK CH merger effective from 1st April, iconic brands such as Horlicks and Boost will now enable us to also address the nutrition needs of consumers. Our approach will be to protect our business model, grow competitively and contribute to the nation," said Mehta.
On the outlook, he said the company remains bullish on the Indian FMCG market in the medium to long term, although it is difficult to give a forecast for the near future due to the ongoing pandemic.
"At this juncture there are many variables which are very difficult to predict. A lot will depend on the trajectory of the virus, what are the containment efforts which till now, I would believe the government has done a tremendous job," he said.
Mehta further said, "Then the severity and duration of the economic impact and also very importantly, with economic activities slowing down will there be impact on demand? The critical question will be has the demand been deferred or has it been shifted or are we talking about whether the demand has been lost?" Shares of HUL on Thursday settled at Rs 2,195.70 on BSE, down 1.63 per cent from the previous close.