UPL financial results for Year ended 31st December 2010
Unilever Pakistan Limited Financial Results for the year ended December 31, 2010At its meeting held on February 14, 2011 at 14:30 Hrs at Karachi, our Board of Directors has approved the financial statements of the Company for the year 2010.
On top of factors like floods, low GDP growth, double digit inflation, deteriorating security environment and debilitating power cuts which impacted businesses in Pakistan in 2010, Unilever Pakistan also suffered due to rampant smuggling of tea. Despite this challenging environment, the Company registered a robust top-line growth of 17%. Turnover was fuelled by strong volume gains in Home and Personal Care, Ice Cream and Spreads.
Impactful innovation, effective communication, bold market place activities and increased advertising contributed to impressive double digit growth.
Growth of the Tea business which represents 29.7% of our sales was affected by smuggling, as only half the 180,000 tons of tea consumed in Pakistan is officially imported. More alarmingly, the incentive to smuggle is growing with the sharp increase in raw tea prices in the international markets. Along with the Pakistan Tea Association, we have proposed to the government to reduce the combined impact of import duty and sales tax to bring smuggled tea into the official net.
This will result in lower prices for consumers for whom tea is the drink of choice, assure the government of its current tax revenue, promote transparency and create a level playing field for legitimate operators. Improved controls over the movement of tea in transit to Afghanistan would help the matter to an extent, but is not in its self sufficient to curb smuggling.
Without reduction in taxes and therefore the incentive to evade, tea will be smuggled into Pakistan through the Iran/Afghanistan route.
Home & Personal Care continues to deliver robust double digit sales growth on the back of strong volume and share gains in key categories - laundry, hair care and skin care. Fuelling this are bigger, better and faster innovations and more focused advertising.
Despite frequent power outages the Ice Cream business, fuelled by strong innovation, achieved 33% growth; virtually all from volume.
The Spreads business achieved double digit volume-led growth as a result of improved visibility, penetration, trial and promotional campaigns.
Rising input costs which were not entirely passed on to consumers, coupled with strategic investment behind brands, impacted Gross and Operating Margins by 229 bps and 181 bps respectively. Strong volume and value growth resulted in 7.1% higher Profit after Tax and Earnings Per Share (EPS).Over the three years to 2010, Sales and EPS have nearly doubled.
Summary of financial performance
(Rupees in million)
Cost of sales
Other operating expenses
Other operating income
Profit from operations
Profit before taxation
Profit after taxation
Earnings per share (Rupees)
The Board of Directors has recommended final cash dividend of Rs.157/- or (314%) per ordinary share. With the interim dividend of Rs.89/- per ordinary share already paid during the year, the total dividend for the year 2010 amounts to Rs.246/- (2009: Rs.229/-) per ordinary share of Rs 50 each. Total profit distributed by way of dividend amounts to 99.9% (2009: 99.6%). The final dividend will be payable to the Members on the number of ordinary shares held by them at the close of business on 29th March 2011.
Closure of share transfer books
The Share Transfer Books of the Company will be closed from 22nd March, 2011 to 29th March, 2011 (both days inclusive), and will re-open on 30th March, 2011. Transfers in good order, received at the Company’s Share Registration Office c/o Famco Associates (Private) Limited, State Life Building No.1-A, I.I. Chundrigar Road, Karachi, by the close of business on 21st March, 2011 will be treated in time for the purpose of payment of Final Dividend to the transferees.
Annual General Meeting
The Board has approved the convening of the next Shareholders Annual General Meeting for 29th March, 2011 at 11:00 Hrs in Karachi.
Unilever Pakistan Limited
Fatimah Jinnah Road
+92 21 566 0870