United Breweries (532478) Q4 01/02 earnings summary

Executive summary

• Brewing operations transferred under the demerger effective Aug. 1, 2001, creating a focused brewing business; FY02 accounts cover eight months and are not comparable with prior-year figures.

• Volume and value grew 12%, ahead of industry volume growth of 6%; the strategic agenda centered on capacity, cost efficiency, and global brand expansion.

• Scottish & Newcastle (S&N) entered a multifaceted financial, marketing, and technical arrangement to support debt reduction and international distribution of Kingfisher.

Financial highlights

• FY02 net turnover was ₹2,074.7 million; sales and services before excise were ₹2,735.4 million, with ₹660.7 million excise duty deducted.

• Reported loss after tax was ₹93.9 million, including a ₹45 million deferred tax asset; loss before tax was ₹138.9 million.

• Consolidated net sales after excise were ₹2,441.2 million; consolidated loss after tax was ₹247.6 million.

• Dividend was skipped because profits were unavailable following restructuring.

Outlook and guidance

• Q1 beer volumes reached 9 million dozen, up 18% YoY versus industry growth of 10%.

• Benefits from capacity expansion and reduced cross-border sourcing were expected to improve net retention and performance in coming years.

• Lower finance charges were expected after the planned ₹2,500 million S&N funding infusion; management anticipated growth in sales and profits.

• Directors expected lower regulatory controls to support beer demand and planned to extend the UB Export low-cost pint initiative beyond Karnataka and West Bengal.