Unilever sales jump on higher prices, but profit slips

LONDON: British consumer goods group Unilever said Tuesday that first-half revenues jumped on higher prices, but net profit fell on rising costs and taxation.

Turnover leapt 15 percent to 29.6 billion euros ($30.2 billion) in first six months of 2022 compared with a year earlier, but sales volumes fell, Unilever said in a statement.

Profit after tax slid almost seven percent to 2.9 billion euros on higher finance, input and restructuring costs, alongside slowing world economic growth.

Unilever manufactures food, cleaning and beauty products, including Magnum ice-cream, Cif surface cleaner and Dove soap.

Input costs are soaring on the back of runaway inflation – and global supply-chain pressures.

“Unilever has delivered a first-half performance which builds on our momentum of 2021, despite the challenges of high inflation and slower global growth,” said chief executive Alan Jope.

Sales were “driven by strong pricing to mitigate input cost inflation, which, as expected, had some impact on volume”.

The company warned that the outlook remains blighted by soaring cost inflation.

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“High-input cost inflation has been widespread across our markets, and it is expected to remain elevated in the second half,” Unilever said.

Alex Smith, analyst at research group Third Bridge, forecast more price hikes were likely in the coming months as a result.

“Inflation will continue to erode Unilever’s margins for the next 12-18 months, although margin pressure has been partly mitigated by price increases in the first half,” Smith noted.

“Our experts see further price increases in the second half.”

Unilever had experienced strong demand for hand and household cleaning products during the coronavirus outbreak.

It cautioned Tuesday that China’s renewed lockdowns had weighed on the Asian giant’s consumer spending in the second quarter of this year.

Unilever became a wholly British company at the end of 2020 after it completed a merger of its Dutch and British corporate entities.