Shares in Unilever rose in early trading this morning (2 August) after the consumer goods giant’s second-quarter results cheered the market.
Unilever, which makes brands including Knorr soups and Ben & Jerry’s ice cream, posted a 5.8% rise in underlying revenues to EUR10.5bn (US$14.3bn). Underlying operating profit for the quarter rose 3% to EUR1.4bn.
The second-quarter figures boosted Unilever’s numbers for the first half of the year. Turnover for the six-month period was also up 5.8%, reaching EUR20.1bn. First-half operating profit remained flat at EUR2.7bn.
Unilever shares had risen by 7.5% by 08:00 this morning as analysts saw the company’s second-quarter results as a positive sign. “There is now real evidence of sustained improvement in the group,” Panmure analyst Graham Jones wrote in a note to clients.
Unilever warned that commodity costs would continue to rise during the second half thanks to soaring prices for edible oils and dairy products. However, the company said the rise in costs would be more than offset by price rises and cost cuts.
The company is looking to would ramp up its innovation programme and raise EUR2bn through disposals of slower growing businesses.
Chief executive Patrick Cescau, however, declined to name which business would be offloaded, outside the company’s plans to sell its North American laundry business.
First-half sales in Europe rose 2.6% thanks to “strong contributions” from markets including the Netherlands, Italy and Russia. Sales in the UK were in line with last year due to lower ice cream sales.
First-half sales in the Americas were up almost 5%, driven by rising revenue in the US.
In Unilever’s “Asia Africa” business, sales leapt by 11.3% thanks to “broad-based” growth, the company said.