Vijay Mallya?s liquor firms have posted contrasting results for the September quarter. His spirits arm United Spirits (USL) plunged 74% in net profit, hit by forex losses and a languid volume growth. However, the company?s beer business United Breweries (UBL), recorded a 75% jump in profit compared to the year-ago period backed by higher growth in some states and cost-containing measures.
During the July-September stretch, USL?s net profit was down to R39 crore from R147.9 crore during the same period last year. The company?s net sales during the period grew 24% to R2,220.7 crore from R1,790.6 crore, a year ago.
?Excess bulk spirit stocks were sold for R314.7 crore ?were this one time sale eliminated from the sales value, net revenue growth would be 6% for the quarter,? United Spirits said. Sales volume dipped 1% to 28.4 million cases in Q2. Key markets of Tamil Nadu and West Bengal continued to dampen USL?s performance during the quarter, the liquor firm said. In Q2, USL had a foreign exchange loss of R34 crore against a gain of R39 crore a year ago.
?An artificially imposed constraint on USL volumes in Tamil Nadu, against the tide of consumer demand for the company?s brands, saw USL volumes being restricted to about 70% of its capacity,? the company said. The Bangalore-based firm said sales in the West Bengal market is slowly coming to terms with the sharp increase in duties and taxes imposed by the state government last fiscal. For the September quarter, volumes of USL were down 3% in the state.
United Breweries reported a net profit of R34.20 crore against R19.52 crore in the corresponding quarter last year. The company said the two periods were not comparable as six subsidiaries had been amalgamated with UBL at various dates during the previous fiscal.
UBL reported net sales of R796.90 crore for the quarter against R689.79 crore a year ago, an increase of 15.52%. The company said that its volumes grew 2% over the year-ago period, despite buoyant growth in the industry, largely because of the Tamil Nadu and Andhra Pradesh markets.
?The lower than industry growth resulted from the continued unfavourable ordering of TASMAC (Tamil Nadu State Marketing Corporation) and change in government policies in Andhra Pradesh in September,? said a company release. Other key markets such as Maharashtra, Karnataka, Rajasthan, Kerala, Bihar and Uttar Pradesh, posted double digit growth.
UBL?s earnings before interest, taxes, depreciation and amortisation (Ebitda) were R111.6 crore.
