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Oct 30, 2008
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Unilever posts 60-percent net profit rise despite economic gloom

By
AFP
Published
Oct 30, 2008

ROTTERDAM, Netherlands, Oct 30, 2008 (AFP) - Dutch-British food and cosmetics giant Unilever posted a 60-percent rise in third-quarter net profits Thursday, October 30rd in spite of the global economic downturn.


Unilever Degree women

"In the first nine months of the year we have delivered over seven percent underlying sales growth," group chief executive Patrick Cescau said in a statement.

"We have strengthened the business in a tough environment. Despite the price rises needed in the light of unprecedented cost increases, our volumes are holding up."

The company was cutting costs and "reshaping the portfolio" to focus on priority brands.

"All this leaves us well placed for the future," said Cescau.

The group posted turnover of 10.4 billion euros in the third quarter, and net profit of 1.7 billion euros (2.25 billion dollars).

The sale of businesses contributed just over one billion euros to the profit figures, said the statement.

This included the sale of a seasoning and marinades business to US rival McCormick & Company for 410 million euros, the Boursin cheese brand to Le Groupe Bel for another 400 million euros, and the 1.45-billion-dollar disposal of Unilever's detergents businesses in the US, Puerto Rico and Canada to investment fund Vestar.

The results were above the expectations of analysts polled by financial agency Dow Jones Newswires, who had predicted a third quarter net profit of 1.58 billion euros.

Unilever, which includes such brand names as Lipton tea, Dove soap and Magnum ice cream, saw its shares trading 2.70 percent higher around noon on Thursday, at a price of some 19.4 euros.

The company said its business in Europe grew by 2.4 percent so far this year, and 3.9 percent in the United States. Growth in developing markets was strong, with 15.1 percent recorded in Asia and Africa in the first nine months.

The company had invested 100 million euros in its brands, including advertising, since the beginning of the year, said the statement.

"This year we now expect to deliver underlying sales growth well in excess of our long-term target range of three to five percent, together with an underlying improvement in operating margin for the year," Cescau said.

Third quarter earnings per share stood at 0.59 euro cents, a 66 percent increase, said the statement. The interim dividend was worth 0.26 euro cents.

An extraordinary general meeting of the company on Wednesday approved the appointment of Paul Polman as executive director from the end of the year.

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