AM­S­TER­DAM - Unilever PLC, the mak­er of Lip­ton tea, Ben & Jer­ry's ice cream, and Axe de­odor­ants, said yes­ter­day strength in de­vel­op­ing mar­kets and its per­son­al care prod­ucts lift­ed its first-half net prof­its. Net prof­it was &eu­ro;2.435 bil­lion (US$2.955 bil­lion), up 1.3 per cent from &eu­ro;2.405 bil­lion in the same pe­ri­od a year ago. The 2011 re­sults ben­e­fit­ed from a &eu­ro;144 mil­lion gain from the sale of Unilever's toma­to busi­ness in Brazil. First-half sales rose 11.5 per cent to &eu­ro;25.4 bil­lion, in­clud­ing a 1.9 per cent rise due to the weak­er eu­ro and 2.2 per cent due to ac­qui­si­tions. Sales in Eu­rope were down 2.2 per cent in the sec­ond quar­ter, as con­sumers feel the pinch of the debt cri­sis. "De­spite de­te­ri­o­rat­ing glob­al eco­nom­ic con­di­tions and a com­pet­i­tive en­vi­ron­ment which re­mains in­tense, we again de­liv­ered vol­ume growth ahead of our mar­kets and gained val­ue share across the ma­jor­i­ty of our busi­ness," said Chief Ex­ec­u­tive Paul Pol­man. "Look­ing for­ward we ex­pect con­tin­ued volatil­i­ty, es­pe­cial­ly in com­mod­i­ty costs and eco­nom­ic con­di­tions. We re­main fo­cused on prof­itable vol­ume growth ahead of our mar­kets, steady and sus­tain­able core op­er­at­ing mar­gin im­prove­ment."

Pol­man re­peat­ed the com­pa­ny's 2012 guid­ance that mar­gins will im­prove mod­est­ly in the sec­ond half. An­a­lysts praised the com­pa­ny's per­for­mance, which con­trasts well with ri­vals such as Proc­ter & Gam­ble and Danone, which have is­sued prof­it warn­ings. Pol­man's guid­ance was "re­as­sur­ing...giv­en re­cent raw ma­te­r­i­al volatil­i­ty," said SNS Se­cu­ri­ties an­a­lyst Richard With­a­gen in a note. He rates shares a hold. "Both the top and bot­tom line ex­ceed­ed ex­pec­ta­tions," With­a­gen said, not­ing that sales gains were more due to price in­creas­es than high­er vol­umes. Shares in the com­pa­ny, which are list­ed in the UK and the Nether­lands, rose 4.7 per cent to &eu­ro;27.605, fol­low­ing gains of around 10 per cent over the past month.

Unilever's per­son­al care prod­ucts di­vi­sion is its largest af­ter ac­qui­si­tions in the US and Rus­sia, and al­so the fastest-grow­ing, with sales up 10.4 per cent. Foods, the next largest cat­e­go­ry, grew the least: 3.2 per cent, en­tire­ly due to price in­creas­es Pol­man said were nec­es­sary to keep up with com­mod­i­ty costs. Unilever said Dove prod­ucts now sell more than &eu­ro;3 bil­lion an­nu­al­ly, while Mag­num ice cream is close to &eu­ro;1 bil­lion. The world's de­vel­op­ing coun­tries proved the most im­por­tant for the com­pa­ny, ac­count­ing for more than 50 per cent of sales. Unilever dis­cussed Eu­rope, its most prof­itable mar­ket, in some depth. It said over­all first half growth of 1.1 per cent "is a cred­itable per­for­mance, giv­en con­tin­ued slug­gish economies and frag­ile con­sumer con­fi­dence." But mar­gins were down 0.8 per cent "main­ly due to the im­pact of high­er com­mod­i­ty costs." Unilever al­so gave Eu­ro­pean sales fig­ures for the sec­ond quar­ter, which showed wors­en­ing con­di­tions. Sales were down 2.2 per cent, with vol­umes down 2.7 per cent com­pen­sat­ed on­ly in part by 0.5 per cent in price hikes. (AP)