Unilever Reports Decline in Profits Fall As Inflation Bites

Unilever announced a drop in first-half net profits on rising costs. The consumer goods giant’s profit after tax dropped five percent to 3.12 billion euros ($3.68 billion) in the first six months of the year compared with the corresponding period in 2020, Unilever said in a statement.

Revenues flattened at around 26 billion euros for the company making food, cleaning and beauty products including Magnum ice-cream, Cif surface cleaner and Dove soap.

Unilever was impacted by exchange rate movements, in addition to inflation strengthening as virus-battered economies emerge from lockdowns.

“We have seen further cost inflation emerge through the second quarter,” noted chief executive Alan Jope.

The company, which experienced keen demand for hand cleaners and household cleaning products last year as the coronavirus outbreak spread, said it continued to be impacted by the pandemic.

“The operating environment across our markets has seen some improvements but remains volatile,” Unilever added in the statement.

Unilever recorded an underlying sales growth of 5.4%, with 4.0% volume and 1.3% price. Price growth stepped up in Q2 while the company’s turnover increased 0.3% including a positive impact of 1.4% from acquisitions net of disposals and negative impact of 6.1% from currency-related items.

Emerging markets grew 8.3%, driven by continued recovery in China and strong performance in South Asia, both growing double-digit. Performance in South East Asia was mixed, with Indonesia declining high single-digit. Latin America grew high single-digit, led by price growth. Developed markets grew 1.5%, as North America and Europe each grew low single digit.