Unilever’s second quarter profits were hit by a rise of £41m in its advertising and promotions budget, the company has revealed.

The increase had reduced the company’s operating margin by 0.6% in emerging markets, the global manufacturing giant said.

Almost £1bn was sliced off the value of the company as shares fell 6% yesterday following the revelation.

However, the company said sales growth had been restored from zero at the end of 2004 to 3.9% in the second quarter of this year. The company is aiming for up to 5% underlying sales growth over the long term.

The group reported pre-tax profits of 1.3bn euros in the second quarter, up 28% on the same period in 2005. Turnover rose 3% to 10.2bn euros.

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