Economy News Shares

Unilever: first-half profit down


Unilever announced a 5% decline in first-half profit to 3.1 billion euros ($3.65 billion), which was partly driven by foreign exchange losses.

In spite of improved operating environments across all its markets, the company maintains that volatility persists.

Sales rose by a mere 0.3% to 25.8 billion euros (30 billion dollars), largely because of a negative currency effect. According to the group, sales would have been much higher with a constant exchange rate.

According to a statement on Thursday, the group’s margins have also been impacted by investments in its brands and by increasing manufacturing costs. Unilever Chief Executive Alan Jope reported that online sales had increased by 50% year-over-year in the first six months of this year.

As the group noted in its statement, the operating environment across its various markets has improved but remains volatile. Daily life restrictions continue around the world, affecting distribution channels, sales mix, and consumer behavior.”

“Restriction in India weighed on the second quarter, but they are relatively less severe than they were last year, while growth in China has normalized; however, it is below pre-covid-19 levels.”

North America and Europe have seen their markets decline compared to the first half of last year, after the first strict containment measures had boosted demand for hygiene and food products.

Although the group is seeing growth in South America, it is experiencing difficulties in Southeast Asia, particularly in Indonesia, where “large parts of the country are under containment” due to a spike in Coronavirus cases.

Jope believes “we can generate sub-par sales growth in 2021 (…) within our multi-year targets of 3-5% despite unfavorable comparison effects in the second quarter.” He also emphasized “we are managing cost volatility aggressively and expect a stable operating margin in 2021.”

For MetaNews.


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Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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