Unilever’s first-quarter sales and net profits both rose

27 July 2022

Unilever, a consumer goods company based in the United Kingdom, saw its revenues rise due to higher prices in the first half of 2022, while its net profit fell due to rising costs and taxes.

Unilever said in a statement on Tuesday that turnover increased 15 percent year on year to 29.6 billion euros ($30.2 billion) from January to June, but sales and net profits volumes fell.

Profit after tax fell nearly 7% to 2.9 billion euros due to higher finance, input, and restructuring costs, as well as slower global economic growth.

Unilever is a food, cleaning, and beauty company that makes Magnum ice cream, Cif surface cleaner, and Dove soap.

Runaway inflation and global supply chain pressures are driving up input costs.

“Despite the challenges of high inflation and slower global growth,” said Chief Executive Officer Alan Jope, “Unilever has delivered a first-half performance [that] builds on our momentum from 2021.”

Sales were “driven by strong pricing to mitigate input cost inflation, which had some impact on volume, as expected,” he added.

The company warned that rising cost inflation would continue to cloud the outlook.

“High input cost inflation has been widespread across our markets,” Unilever said, “and it is expected to remain elevated in the second half.”

Tesla’s profit fell in the second quarter, but it exceeded expectations.

As a result, Alex Smith, an analyst at research firm Third Bridge, predicted that more price increases were likely in the coming months.

“Inflation will continue to erode Unilever’s margins for the next 12 to 18 months, although price increases in the first half have partially mitigated margin pressure,” Smith said.

“Our experts anticipate additional price increases in the second half,” he added.

During the coronavirus pandemic, Unilever saw a surge in demand for hand and household cleaning products.

Inflation may have reached 6.5 percent in June in sales and net profits.

It warned on Tuesday that China’s renewed lockdowns had hampered consumer spending in the Asian giant’s second quarter.

After a merger of its Dutch and British corporate entities, Unilever became a wholly British company at the end of 2020.