Unilever first half profits soar 22.4%

[THE HAGUE] Food and consumer products giant Unilever said Thursday profits soared in the first half of 2017, raking in 3.3 billion euros (S$5.205 billion) after the Anglo-Dutch firm spurned a takeover bid by US rival Kraft Heinz.

The 22.4 per cent hike in the first six months compared to the same period last year showed "a substantial step-up in profitability despite the persisting volatile global trading environment", chief executive Paul Polman said.

"The transformation of Unilever into a more resilient, more competitive and more profitable business is accelerating," he added in a statement.

Sales for the first half of the year rose 5.5 per cent to 27.7 billion euros, with turnover growing particularly in Asia amid rising prices and in parts of the Americas.

Currency fluctuations also helped profits, even though sales "remained weak" in Europe.

The Rotterdam-based Unilever, which employs some 169,000 people around the world, owns more than 400 household brands including Dove, Knorr soups, Lipton, Magnum and Marmite.

Since rejecting the Kraft Heinz bid in February, Unilever has sought to prove to shareholders that it is better off on its own and vowed better profitability.

In April, it unveiled a 3.5-billion euro restructuring plan and announced the spin-off of its margarine division, hoping to soothe investors concerns after rejecting the proposed tie-up with Kraft which would have valued the group at US$143 billion.

"The preparation for the exit from spreads via a sale or de-merger is well underway," the company said in a statement, adding the board was expected to decide on the way forward before the end of the year after the results of a review.

Excluding spreads, underlying sales growth was up 3.4 per cent, and the company said it was offering 1.09 euros per share, up 24.1 per cent.

Mr Polman predicted "accelerated growth" in the second half of the year for Unilever and said underlying sales growth for 2017 would be in the three to five per cent range.

Unilever is listed in both London and on the Amsterdam AEX, an historic status which the company is also reviewing.

AFP