Unilever earnings rise

August 3, 2001 Posted: 0708 GMT

LONDON (CNN) -- Unilever, the world's No. 3 consumer goods maker, said on Friday second-quarter earnings rose 8 percent as it benefited from acquisitions.

The Anglo-Dutch consumer goods company said net profits before items and amortization of goodwill in the three months to June 30 rose to 841 million, or 0.84 per share, from 782 million, or 0.77 a share.

Unilever, with brands such as Dove soap, Signal toothpaste, and Hellman's mayonnaise, said sales rose 15 percent to 13.7 billion from 11.9 billion in the same three months of 2000.

In the past year, Unilever has bought U.S. drinks company Slim-Fast, gourmet ice cream maker Ben & Jerry's, and diversified food maker Bestfoods for a total of $24.4 billion. These purchases have driven up sales.

Operating profit, boosted by acquisitions in North America, rose 34 percent in the quarter to 1.76 billion from 1.31 billion as U.S. sales rose 26 percent. European sales grew 6 percent, driven by spreads and cooking oil.

The company said it also made a pretax profit of 813 million from selling brands to win regulatory approval for the Bestfoods acquisition.

Unilever, which is in the midst of a five-year restructuring, announced plans in April to axe 8,000 jobs as it adjusts to the U.S.-led economic slowdown and integrates recent acquisitions.

Economic downturns, however, traditionally have less impact on consumer goods products companies as people still have to buy basics. Unilever was upbeat for the rest of the year and reiterated its forecast of double-digit earnings per share for 2001.

"Economies are slowing in many regions," said Unilever Chairman Niall FitzGerald. "However, our work on portfolio focus and restructuring strengthens our capacity to cope with difficult conditions."

Under its new strategy, Unilever will cut its brands from 1,600 to just 400 as the company aims to concentrate on three areas: foods, home and personal care products.

Among its frontline products will be Lipton teas, "I Can't Believe It's Not Butter!" spreads, Ragu pasta sauces, Knorr soups, Slim-Fast health snacks, Surf laundry detergents and Snuggle fabric softener.

Unilever broke up the Bestfoods business and on July 30 completed the sale of a Bestfood unit, Bestfoods Baking, to George Weston of Canada for U.S.$1.65 billion in cash.

It also disposed of a number of European brands such as Batchelors and Oxo to Campbell Soup for regulatory reasons.

With the remainder of the Bestfoods acquisition, the company consolidated its No. 3 position in the global league table of basic consumer goods makers behind Nestle and Philip Morris Philip Morris (MO: Research, Estimates), owner of Kraft foods.

Unilever shares (ULVR) slipped almost 1 percent to 597 pence in early London trade.

	Want the full story? Search for free company info...
	Enter Company Name:-