Food and cosmetics company Unilever reported a third quarter net profit drop of 35% to 1.1 billion euros even as sales volumes grew in "challenging" market conditions.

"Market conditions remain challenging and in this environment we will continue to increase investment behind our brands and build long-term capabilities in research and development," Unilever chief executive Paul Polman said. "We are on track towards our objective of restoring volume growth while protecting margins and cash flow for the year as a whole."

Unilever, the maker of such brands as Knorr soups, Dove soap, Lipton tea and Omo detergent, said third quarter sales volumes grew by 3.6%.

Turnover fell by two percent to 10.2 billion euros (US$15.15 billion), and operating profit by 41% to 1.5 billion euros.

"All regions showed an improving trend in both volumes and operating margins in the third quarter," the company said.

Volume growth was especially strong in Asia, where "economic conditions are slowly improving in several key countries but overall growth in consumer demand continues to be slower than in the past."

Copyright Agence France-Presse, 2009