Unilever Consumer Care's profit falls 12pc as royalty charges return

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Unilever Consumer Care's profit dropped 12 per cent year-on-year to Tk 121 million in January-March this year, weighed down by sluggish sales amid persistent inflation and the reimposition of royalty charges by its parent company.
Earnings per share (EPS) fell to Tk 6.29 in the March quarter from Tk 7.16 in the same period a year ago, according to a price-sensitive disclosure issued on Monday.
The company said profit had shrunk mainly due to the reinstatement of technology and trademark royalty payments, alongside the absence of a one-off gain from the reassessment of past obligations that had boosted earnings in the corresponding quarter last year.
Revenue posted a marginal 8 per cent year-on-year decline, as high inflation continued to erode consumers' purchasing power. Demand for Horlicks-which contributes over 90 per cent of the company's total revenue-remained subdued, particularly during Ramadan, when consumption patterns typically shift.
Masud Khan, chairman of Unilever Consumer Care, attributed the weak performance to a combination of macroeconomic and seasonal factors.
"A depressed economy, the national election, and Ramadan all contributed to the pressure on sales and margins," he added.
Industry insiders note that consumer spending has remained cautious across the fast-moving consumer goods (FMCG) sector, with households prioritising essential food items over discretionary products.
Once considered a staple, Horlicks is increasingly being treated as a non-essential item amid elevated living costs.
Inflation hovered around 9 per cent during the quarter, and analysts caution that price pressures may persist in the near term due to global uncertainties, including supply disruptions and rising costs linked to geopolitical tensions.
Despite the earnings setback, the company's cash flow position improved significantly. Net operating cash flow per share turned positive at Tk 12.74, compared to negative Tk 19.03 in the same quarter last year.
Mr Khan said the improvement was largely due to the absence of large settlements of Usance Payable at Sight (UPAS) letters of credit, which had weighed heavily on cash flow in early 2025. "This year, we did not have that burden, which helped restore positive operating cash flow," he added.
Meanwhile, the company's share edged up 0.35 per cent to Tk 2,073 on the Dhaka Stock Exchange on Monday.
Annual performance
Unilever Consumer Care's annual profit grew 19 per cent year-on-year to Tk 794 million in 2025, supported by higher sales of Horlicks.
Sales of Horlicks gradually climbed over the four consecutive quarters to December last year after a sharp decline in 2024 owing to double-digit inflation.
Moreover, the company registered around 6 per cent year-on-year revenue growth to Tk 3.58 billion last year, as inflation fell below 9 per cent from June after remaining in double digits for more than two years.
Despite reporting higher profit, the board of directors declared a 420 per cent cash dividend for the year, much lower than the 520 per cent cash dividend paid the previous year.
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