Anglo-Dutch consumer products giant Unilever reported a 2 per cent increase in underlying half-year net profits this morning and relieved investors by holding its 2003 earnings growth target.
Unilever, the maker of top brands such as Dove, Lux, Lipton and Knorr, stuck to its target of more than 10 per cent earnings growth in 2003 despite a shock warning in late June when it cut its 400 top brand sales target to 4 per cent.
The 400 top brands only showed 3.1 per cent sales growth in the first half. The group is betting on a big recovery in the second half, with top brand sales growing around 5 per cent so as to hit its annual target of 4 per cent.
Unilever, the world's third-largest food group after Nestle and Kraft, posted first-half net profit before exceptional items and amortisation (BEIA) of €1.874 billion ($2.16billion).
Overall net profit rose 14 per cent to €1.265 billion, near consensus expectations of €1.36 billion.
Unilever's finance director Mr Rudy Markham was confident of hitting the earnings and sales targets as he saw a fairly benign economic outlook for the second half and as the group addressesthe problems that led to its first-half sales shortfall.
"We have identified the problems and are taking action. This reinforces our confidence in reaching our earnings target for the year," Mr Markham said. He added its plan called for 5 per cent top brands sales growth in the second-half.