Unilever profit jumps on asset sale, higher prices

LONDON: British consumer goods giant Unilever on Tuesday said its net profit jumped more than a fifth in the first half thanks to an asset sale and price increases.

Profit after tax rose 22 percent to 3.54 billion euros ($3.9 billion) in the six months to the end of June from a year earlier, said the maker of products ranging from Magnum ice cream and Cif surface cleaner to Dove soap.

Unilever said it gained 497 million euros from the sale of personal-care business Suave in North America, adding it had passed on higher costs to customers in the form of sharp price increases for goods.

“In normal circumstances, significant price rises would be accompanied by large declines in volumes as customers move elsewhere,” noted Richard Hunter, head of markets at Interactive Investor.

“For Unilever, however, with its suite of household names, this has simply not been the case.”

Shares in Unilever rallied around five percent following the results, making it one of the day’s best performers on London’s benchmark FTSE 100 index.

Underlying sales jumped 9.1 percent on price growth of 9.4 percent across its products.

Sales in terms of volumes dipped by only 0.2 percent.

Businesses and consumers worldwide continue to battle higher costs as inflation remains stubbornly high, especially in the UK.

Unilever added that its turnover increased to 30.4 billion euros in the first six months of the year.

“Unilever’s performance in the first half highlights the qualities that attracted me to the business: an unmatched global footprint, a portfolio of great brands and a team of talented people,” said new chief executive Hein Schumacher.

The former head of Dutch dairy and nutrition firm Royal FrieslandCampina replaced Alan Jope this month.

Scotland-born Jope departed after coming under fierce pressure from activist investors.

Last year he oversaw Unilever’s failed $50-billion bid for the former healthcare unit of drugmaker GlaxoSmithKline.

Unilever has come under fire also from Kyiv, which earlier this month placed the group on Ukraine’s “International Sponsors of War” list, claiming it continues to profit from operations in Russia.

Unilever continues “to condemn the war in Ukraine as a brutal and senseless act by the Russian state”, but acknowledges that it is supplying Russia-made food and hygiene products to people in the country.