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Unilever profits drop as inflation fears range on

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LONDON, United Kingdom, Jul 22 – British consumer goods group Unilever on Thursday announced a drop in its first-half net profit owing to rising costs.

Profit after tax dropped by five percent to 3.12 billion euros ($3.68 billion) in the first six months of the year compared with the corresponding period in 2020, Unilever said in a statement.

Revenues flattened at around 26 billion euros for the company that makes food, cleaning and beauty products, including Magnum ice-cream, Cif surface cleaner and Dove soap.

Unilever was impacted by exchange rate movements, in addition to inflation strengthening as virus-battered economies emerge from lockdowns.

“We have seen further cost inflation emerge through the second quarter,” noted chief executive Alan Jope.

Unilever was impacted by exchange rate movements, in addition to inflation strengthening as virus-battered economies emerge from lockdowns/ courtesy

The company, which experienced keen demand for hand cleaners and household cleaning products last year as the coronavirus outbreak spread, said it was still being affected by the pandemic.

“The operating environment across our markets has seen some improvements but remains volatile,” the Unilever statement said.

The company’s shares slumped by 5.7 percent to £40.56 in London midday trading following the update.

The group’s “profit is being compromised by rising costs”, said AJ Bell investment director Russ Mould.

“The surge in (Covid) infections in the developing world is unhelpful to Unilever given its strong emerging markets footprint,” he added.

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The results update comes after Israel’s Prime Minister Naftali Bennett this week warned Unilever that a decision by its subsidiary Ben & Jerry’s to stop selling ice cream in the occupied Palestinian territories would have “severe consequences”.

Ben & Jerry’s on Monday said that selling ice cream in the Israel-occupied Palestinian territories was “inconsistent with our values”, although it said it planned to keep selling its products in Israel.

Unilever became a wholly British company at the end of the last year after it completed a merger of its Dutch and British corporate entities.

 



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