Unilever Consumer Care's profit surges on cost-cutting measures

Unilever Consumer Care secured an 11.15 per cent year-on-year profit growth in January-March this year, despite decrease in revenue.

In an earnings disclosure, it said it had curbed operating expenses by a remarkable 34.42 per cent in the three months to March, compared to the same period a year ago, and that helped boost income.

Apart from cost-cutting measures, the company got advantage of its cash funds that drove up finance income.

Finance income surged 13.60 per cent to Tk 46.95 million in the January-March quarter of this year from the same period of the previous year.

The company also enjoyed a waiver of the royalty and technical assistance fee charged by its parent company Unilever. Usually, all multinational companies charge royalty for using their brands and other services.

The company's total revenue comes from sales of health food drink Horlicks and glucose powder. The sales volume declined 13.40 per cent to Tk 939.81 million in January-March this year from the corresponding period last year.

A one-off benefit from reassessment of past liabilities and obligations was another reason behind the company's year-on-year profit growth in the first three months of 2024.

The company gained a robust year-on-year growth in operating cash flow for January-March this year, compared to a year earlier, because of what company officials said was deferred settlement of Usance Payable at Sight (UPAS) LCs.

Moreover, its net asset value per share surged by 9.5 per cent to Tk 133.82 in the first three months of 2024.

The increase in net asset value per share was attributed to a higher balance of cash and cash equivalents, coupled with a one-off benefit from the reassessment of past liabilities.

Meanwhile, after the earnings disclosure the stock climbed down on the Dhaka Stock Exchange on Thursday to close at Tk 1862.40 per share.

In 2020, Unilever Overseas Holdings BV acquired 82 per cent of GlaxoSmithKline (GSK) Bangladesh Ltd.

GSK Bangladesh, a subsidiary of the British pharmaceutical giant GlaxoSmithKline PLC, got listed on the DSE in 1976. Its business took a turn for the worse in 2018 when it had to shut down its pharma plant in Bangladesh in the face of harsh competition with the local drug manufacturers.

The company, however, decided to retain its health food segment at that time.

In 2023, Unilever Consumer started to use the shuttered factory in Chattogram for processing and packaging Horlicks in a bid to minimise cost.

Rather than producing Horlicks in Bangladesh, Unilever imports its raw materials in bulk from India and does the packaging here.

Earlier, the company used to process and package Horlicks by using the factories of other companies through contract manufacturing.

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