Unilever Announces Profits Fall As Inflation Bites

British consumer goods group Unilever on Thursday announced a drop in first-half net profits on rising costs.

Profit after tax dropped 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 making 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.

The company, which experienced keen demand for hand cleaners and household cleaning products last year as the coronavirus outbreak spread, said it continued to be impacted by the pandemic.

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

The results update comes after Israel’s Prime Minister Naftali Bennett this week warned Unilever that its subsidiary Ben & Jerry’s decision 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 the historic merger of its Dutch and British corporate entities.