United Breweries (532478) Q4 02/03 earnings summary

Executive summary

• FY ended Mar. 31, 2003: beer volumes rose 17.2% to 30.5m cases, ahead of estimated industry growth of 12%; market share increased 300 bps to 37%.

• Standalone net profit was Rs 14.4m versus a loss of Rs 93.9m; consolidated results remained loss-making, with net loss of Rs 90.6m.

• Strategic funding arrangements with Scottish & Newcastle (S&N) were intended to reduce borrowing costs, support capacity and deepen the brewing partnership.

Financial highlights

• Standalone net sales were Rs 4,050.4m; stated growth was 11% against a comparable full prior year of brewing operations.

• Standalone profit before tax was Rs 37.5m, including a Rs 20.1m diminution provision; excluding this non-recurring item, PBT was Rs 57m. PAT was Rs 14.4m.

• Consolidated net sales after excise were Rs 4,134.8m; consolidated PAT was a loss of Rs 90.6m, versus a loss of Rs 247.6m in the prior period.

• Standalone year-end cash and bank balances were Rs 113.9m; consolidated balances were Rs 114.8m.

Outlook and guidance

• Beer demand was expected to grow over the coming years, supported by young demographics, low per-capita consumption and changing consumer attitudes; growth depended on a more favourable regulatory environment.

• Further gradual deregulation was anticipated, while regulatory progress remained slow; engagement with state governments on beer taxation and availability was continuing.

• Capacity and technology investments were planned to meet anticipated demand; pint packs were being discussed for launch in additional states.