United Breweries (532478) Q4 99/00 earnings summary

Executive summary

• FY00 net profit was Rs 110.0m on total income of Rs 3,856.9m; earnings included Rs 891.0m net profit on investment sales.

• Beer volumes and market share held up despite weak industry demand and new global competitors; Kingfisher Strong was a major growth driver.

Financial highlights

• Sales and service income was Rs 2,807.9m vs Rs 3,029.9m in FY99; other income rose to Rs 1,049.0m from Rs 453.1m.

• Profit before tax was Rs 215.0m vs Rs 127.5m; net income was Rs 110.0m vs Rs 122.1m, after tax provision of Rs 105.0m vs Rs 5.35m.

• Net investment-sale profit was Rs 891.0m; dividend income was Rs 75.2m.

• Recommended dividend was Rs 2 per equity share (20%); proposed dividend plus tax totaled Rs 92.1m.

Outlook and guidance

• FY01 state policy changes included distribution openings, differentiated duties for mild and strong beer, relaxed promotion and sales rules, and more liberalized licensing.

• Directors were cautiously optimistic on progressive deregulation and planned continued brand promotion and quality improvements amid expected multinational entrants.

• Kingfisher Strong's rollout was being accelerated after sales exceeded 2m cases in 10 months; Q1 FY01 volumes were up 25% YoY.

• Disinvestment proceeds were intended for debt reduction and investment in core brewing; restructuring aimed to separate brewing and investment activities and unlock asset value.