LONDON (AFP) – British consumer goods group Unilever yesterday logged a rising net profit in 2021 but warned that soaring inflation will likely ramp up costs again this year.
Profit after tax rose 8.4 per cent to EUR6.0 billion last year compared with EUR5.6 billion in 2020, Unilever said in a statement.
The group, which faced fierce criticism over its failed USD50-billion bid for drugmaker GlaxoSmithKline’s (GSK) healthcare unit, ruled out any major acquisitions and pledged to return EUR3 billion to investors via share buybacks.
The producer of food, cleaning and beauty products, including Magnum ice cream, Cif surface cleaner and Dove soap, added that revenues advanced 3.4 per cent to EUR52.4 billion.
“The major challenge of 2021 has been the dramatic rise of input costs,” said Chief Executive Alan Jope, referring to overhead expenses.
“We responded with pricing actions,” he added, noting that prices were hiked by 2.9 per cent during the year – and accelerated to 4.9 per cent in the fourth quarter.
Surging global inflation is hurting consumers, just as virus-battered economies recover from Covid lockdowns.
As a result, Unilever warned that it expected “very high input cost inflation… of over EUR2 billion” in the first half of this year.
“This may moderate in the second half to around EUR1.5 billion, although there is currently a wide range for this that reflects market uncertainty on the outlook for commodity, freight and packaging costs,” it added.
Yesterday’s results come after Unilever recently failed to purchase the consumer health care business of drugmaker GSK.
Glaxo revealed last month that it had received three unsolicited Unilever offers for the unit, which is owned by GSK and US peer Pfizer, but rejected them all as too low.