This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXMPED790RZ_M.jpg
Investing.com — Henkel (ETR:HNKG) stock fell, then recovered, in early trade in Frankfurt on Monday after the German consumer products giant said inflation and write-offs due to the exit from its Russian business ate into profits in the first half.
The company reported a 9.9% rise in sales over the first six months, with its industrial glues posting the biggest gains, but the figures were flattered by the depreciation of the euro in that period, while the cost of generating those sales rose 18%, with especially high increases in costs for raw materials, packaging and freight. At constant exchange rates, adjusted earnings per share fell 21%, none of the group’s businesses being able to escape the trend of margin compression.
Adjusted operating profit fell 1.17 billion euros from 1.43 billion a year ago, while net profit more than halved to 448 million.
The company had already booked some 281 million euros ($287 million) in impairments after deciding to exit traditionally profitable businesses in Russia and Belarus in the wake of Russia’s invasion of Ukraine in February. It had also booked some non-cash charges for the integration of its beauty and laundry units into a single consumer products division.
The stock was supported by another modest upgrade to the company’s sales forecast for the full year,. It now sees organic sales growth of between 4.5% and 6.5%, an increase of 1 percentage point from its previous estimate.
By 05:00 ET (09:00 GMT), Henkel’s preferred (ETR:HNKG_p) stock in Frankfurt was flat, having earlier slipped as much as 2%.
