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Anglo-Dutch group Unilever was unable to meet fourth-quarter sales expectations on Thursday, as the consumer goods maker struggled with inflation in Argentina and flat volume growth in developed markets.

For the latest quarter, Unilever said annual net profit was up 51 percent to €9.8 billion ($11.21 billion), compared to the €6.5 billion profit growth posted in 2017.

However, the company pointed to the tough market setting throughout the previous year, particularly currency devaluations and increasing commodity costs that weighed on demand.

Shares of Unilever dropped more than 2 percent shortly after the market open in Europe. The stock was last down 1.8 percent to £3,976.56.

Slowdown in Latin America

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As regards underlying sales growth, Unilever reported underlying sales increase of 2.9 percent, ending below analysts’ average estimate of 3.5 percent, according to a consensus forecast provided by the firm.

The London-based manufacturer, which is trying to move on from 2018’s rejected plan to move its headquarters from the UK to the Netherlands due to concerns over uncertainty surrounding Brexit, had stated that full-year sales would be at the bottom end of its 3 to 5 percent forecast range.

Unilever Chief Executive Alan Jope said looking forward, they have indicated that they expect growth to be more in the 3 to 4 percent range, which is the lower half of their ongoing guidance and it basically reflects some of the volatility in emerging markets, notably in Latin America.

Jope explained that the real issue is volatility in emerging markets, when we see notable slowdowns in places like Argentina, Brazil, and Southeast Asia then that is why they come in at the lower end of the growth range.

The company also sees continued increase in underlying operating margin and another year of strong free cash flow, and said it remained on track for its 2020 goals.

Unilever cited Argentina, which accounts for 2.5 percent of its overall business, as the reason for the weakness in the fourth quarter. Hyperinflation in the country resulted in a price rise of over 50 percent and therefore leaving volume with a more than 20 percent slump in the quarter.

For the most part, sales volume in the Americas was flat, as improvement in pricing was offset by volume slides. It was the same in Europe, but the group’s sales rose 0.8 percent in the region.

Overall, Unilever’s underlying sales in developed markets only advanced by 0.4 percent in the fourth quarter.

The firm saw declines in France and competitive pressures in North America, particularly in ice cream and mayonnaise to be the main cause of the drop.

For the full year, Unilever reported turnover of €49.6 billion ($57.05 billion), excluding its divested spreads business, with underlying sales adding 3.1 percent, in line with expectations.

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