United Breweries (532478) Q4 07/08 earnings summary

Executive summary

• FY08 net turnover rose 30% to Rs 13,948.6m; PBIDT increased 22.1% to Rs 1,972m, while PBT and PAT declined on higher interest, depreciation and amortisation.

• Combined brand sales exceeded 75m cases; leadership was maintained despite input-cost pressure, regulated pricing and rising competition.

Financial highlights

• Net turnover was Rs 13,948.6m versus Rs 10,748.7m in FY07; reported growth was 30%.

• PBIDT rose to Rs 1,972.7m from Rs 1,615.1m; PBT was Rs 932.1m versus Rs 949.9m, and PAT was Rs 624.7m versus Rs 650.9m.

• Manufacturing expenses increased to 50.70% of net sales from 49.81%; higher malt and bottle costs reduced profit margin by 3% YoY.

Outlook and guidance

• FY09 beer-industry growth was expected to remain in line with preceding years, with the Strong segment expected to retain its market dominance.

• Capacity additions across 8 locations are planned to add 1.475m HL of annual beer capacity; two greenfield breweries are planned at Mallepally and Nanjangud.

• Prospects identified include low-alcohol and flavoured beer, premium beer, and greater retail access through deregulation and supermarkets.