Price hikes fuel Unilever growth

Consumer goods giant Unilever raised its prices sharply in the second-quarter to offset a hike in commodity costs helping it on Thursday to beat forecasts with 7.1 per cent rise in quarterly sales growth.

The Ben & Jerry's ice cream and Dove soaps group suffered a fall in margins due to the time lag between costs rising and price being raised, but chief executive Paul Polman looks for a second half recovery as its price rises and costs savings bite.

Growth was driven by the group's big emerging market presence in Asia, Africa and Latin America, helped by hot weather in Europe for its ice cream and beverage business as well as by raising price across the board for consumers.

Polman stuck to his 2011 goals of profitable sales volume growth ahead of its markets and higher profit margins despite cost inflation and tough trading in the mature markets of Western Europe and the United States.

The Anglo-Dutch Unilever posted second-quarter underlying sales growth of 7.1 beating to a company compiled consensus of 5.5 per cent, after rival Danone posted growth of 8.8 percent last week with Nestle reporting next week.

The maker of <a href=""; target="_blank">Knorr</a> soups and Sunsilk shampoo reported half-year earnings up 10 percent to 0.77 euro a share compared to a consensus of 0.71 euros while the six-month operating margin fell 0.2 points compared a forecast for a 0.5 point fall.