Unilever, a global giant in the food industry and cosmetics sectors, reported a 40% leap in quarterly net profit on August 5, but said that the crisis in Greece had immediately hit cosmetics sales.
The outcome for the second quarter, in line with analysts' expectations, was driven by strong sales. In Greece, the company had reacted to new spending cutback realities with promotions priced at one euro (US$1.315.)
The net group profit figure was 1.06 billion euros (US$1.39 billion) from 758 million euros in the same period of last year, but said that conditions were difficult in developed countries.
This took the results for the whole of the first half of the year to 2.03 billion euros, a rise of 37% from the equivalent figure last year.
Unilever said that the volume of sales had continued to rise after the trend in the first quarter when they had surged by 7%. In the second quarter the rise was 5.7%.
Sales volumes rose in all divisions of the group, led by sales of personal-care products which rose by 7.8%, and they rose in all regions except in western Europe.
The increase was particularly strong in Asia and in Africa where sales volumes rose by 10% or more for the third quarter in a row.
Unilever counts among its brands Knorr soups, Dove soap and Rexona deodorants. The group employs about 160,000 people in more than 100 countries.
In Latin America, sales were also firm.
But in western Europe, "markets were difficult, particularly in southern European countries such as Greece, Spain and to a lesser extent Italy."
The company said that in this region: "We continue to pursue our strategy of investing behind our brands and bringing strong innovations to market. This approach is delivering good results, with both volume and value shares up."
In an insight into the effect of crisis and austerity measures on discretionary spending, Unilever said: "Excluding Greece, where market volumes were down substantially, underlying volume growth in western Europe in the second quarter was positive. "However, our Greek business responded quickly to the crisis with one-euro promotions crafted to reflect the new economic reality."
Chief executive Paul Polman said that the outcome was encouraging given difficult conditions in terms of the economy and competition. He warned that rises in raw materials prices were in the pipeline for the second half.
The group also warned that it would not be able to raise prices as it wished, because of pressures from the economic crisis and strong competition.
Polman said that the group's prices had again fallen in the second quarter, but at a slower rate than in preceding months and should begin to recover towards the end of the year.
Copyright Agence France-Presse, 2010