United Breweries (532478) Q4 98/99 earnings summary

Executive summary

• FY98-99 beer volumes grew 5% to 22.7 million dozens despite a contracting market; leadership held, while profit after tax fell to Rs 122,139,176 from Rs 200,549,350.

• Strategy centered on strong-beer growth, Kingfisher brand investment, focus on core businesses and divestment of selected non-core holdings.

Financial highlights

• Sales and service income was Rs 3,029,944,583 versus Rs 3,152,466,710; total income, including other income, was Rs 3,483,073,112 versus Rs 3,639,630,273.

• Profit before tax fell to Rs 127,489,176 from Rs 255,755,560; profit after tax was Rs 122,139,176 versus Rs 200,549,350.

• Other income included a net Rs 230,835,929 gain on investment sales; prior-year investment-sale gain was Rs 382,563,397.

• Kingfisher volumes rose 7% to 13.8 million dozens and accounted for 25% of beer sold nationally; total volumes reached 22.7 million dozens.

Outlook and guidance

• Kingfisher Strong Premium Beer launched in May 1999 across Maharashtra, Haryana and Karnataka; rollout to other markets was planned, with high marketing and promotional spending expected to support the launch.

• FY99-00 priorities included refreshing Kingfisher graphics and packaging, expanding strong beer nationally and extending Kingfisher mineral water, then operating in more than 10 states.

• Current-year prospects were described as satisfactory barring unforeseen circumstances; aggressive promotions were expected to strengthen Kingfisher brand equity.