Unilever revenue up 8.9% amid growth constraints

Unilever's factory and distribution cetnre. Image: Skyscraper City

Although Unilever SA is unlisted‚ investors get a small peek into the performance of the company via Stellenbosch-based Remgro.

Remgro - which also controls newly constituted consumer brands conglomerate RCL Foods - holds a 25.8% stake in the company that is well known for distributing household brands such as Vaseline‚ Omo‚ Robertsons‚ Rama‚ Flora‚ Lipton‚ Joko‚ Sunlight‚ Surf and Lux.

Remgro's latest investment presentation - covering the six months to December - shows revenue for Unilever up 8.9% to R8.9bn with profit after tax coming in 3% lower at R1.03bn (previously R1.06bn).

Unilever's contribution to Remgro's interim headline earnings was 1% higher at R280m‚ underpinning the group's valuation of R8.9bn placed on its stake in the business.

The top line performance by Unilever appears to be similar to that of AVI, which reported a 10% hike in turnover to R5.4bn in the half-year to end December and Tiger Brands, which showed a 10% gain in turnover to R7.74bn in its first financial quarter to end December.

Remgro's chief executive Jannie Durand said the increase in Unilever's revenue was mainly driven by increased volumes in the home care‚ ice cream‚ savoury and dressings categories.

Durand said Unilever's food and personal care segments performed well‚ but the home care side faced competitive trading conditions especially in the washing powder segment. "It is difficult to predict what is going to happen (in the home care segment)," he said.

Last year Business Day reported that Unilever was embroiled in a washing powder war when its long-standing brand dominance through Omo‚ Surf and Skip was challenged by Proctor & Gamble's Ariel washing powder.

Durand added that Unilever also incurred restructuring costs on the streamlining of the home care and personal care factories to drive cost efficiencies.