United Breweries (UBL), India’s largest beer company, on Thursday reported a 4.6% decline in the net profit to R123 crore for the first quarter...
United Breweries (UBL), India’s largest beer company, on Thursday reported a 4.6% decline in the net profit to Rs 123 crore for the first quarter ended June 30 as volume growth remained muted in line with the industry trend. A year earlier, the company had reported a net profit of Rs 129 crore.
Net sales went up 4.6% to Rs 1,338 crore against Rs 1,279 crore in the corresponding quarter. The operating profit was marginally up by 1.5% at Rs 206 crore against Rs 203 crore a year ago.
The company is engaged in the manufacture and sale of beer including licensing of brands, which constitutes a single business segment. The company also considers India as a single geographical segment. Further, considering the seasonality of the business, the revenue and profits do not accrue evenly over the year, the company said in a filing to BSE.
“In spite of a revenue increase by 4% driven by the selective price increases taken by the company in key markets, the profit before tax development shows a minus of 3% because of an extra-ordinary benefit included in Q1 figures of last year, being a one-time government subsidy of Rs 10.9 crore. The adjusted PBT is almost 3%,” the company said.
With the industry lagging behind with a 2% drop in volume against last year’s Q1, UBL’s volume ended 1% below the previous year. The company posted a good volume growth in selective markets such as Telangana, Madhya Pradesh, Kerala, Karnataka and Chhattisgarh. The company maintained its national market share despite uneven growth across markets. The industry was sluggish in the beginning of the quarter especially in the Eastern market due to pricing issues with the Corporation of Orissa and a further decline of volume in Tamil Nadu, the statement added.
UBL also said its acquired brewery Pacific Spirits in Rajasthan is likely to commence operations in Q3FY16. The company’s scrip closed 0.83% lower to Rs 999.75 on the BSE.
Shekhar Ramamurthy will replace Kalyan Ganguly as managing director of the company with effect from August 1, 2015. Frans Erik Eusman has been appointed as an additional director on the board. The board of directors at their meeting held on Wednesday announced changes in the top management. The company said S Roland Pirmez has resigned from the board, the company said in its filing to BSE.
Ganguly (64) served the UB Group for 36 years, of which the last 19 years he was CEO and MD of United Breweries.
“The board has reluctantly accepted his wishes. He will quit office on July 31, 2015,” the company said in a statement.