Unilever Q2 profits rise by 40%

Unilever

Global food and cosmetic giant Unilever has reported an increase of 40 percent in their quarterly net profits, driven by strong sales and meeting analysts' expectations.

The 3.6 percent rise in sales was not as large as the company would have liked, due to rising pressure from competitors and higher commodity costs, but Chief Executive Paul Polman said that robust growth in emerging markets had help offset "sluggish performances" in Europe and North America.

However, Polman cautioned about the figures, saying that the second half of the year would see added competition as well as raw material prices rising again.

Net figures for the company saw profits rise from €758 million to €1.06 billion for the same period the year before. This took the results for the whole of the first half of the year to €2.03 billion, a rise of 37 percent from the equivalent figure last year.

Unilever said that the volume of sales had continued to rise after the trend in the first quarter when they had surged by 7.6 percent. In the second quarter the rise was 5.7 percent. The value of sales in the second quarter jumped by 12.4 percent to €11.752 billion, slightly higher than forecast by analysts who had expected a rise of 11 percent.

Company growth

Unilever, the company behind Ben & Jerry's ice cream, Knorr soup and Dove soap has been led by Polman since he headed the company's revival 18 months ago. He has based the company's resurrection on strong growth from emerging markets and trying to reignite growth in more mature markets.

His strategy has been to cut prices, raise marketing spending and look for volume-led growth and higher profit margins.

Unilever is the world's third-biggest food and consumer goods group, after Procter and Gamble and Colgate Palmolive. The rivals have suffered in recent years as they have had to raise spending to attract value-seeking shoppers. Analysts say this tough competition is not likely to ease any time soon.

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