United Spirits (UNITDSPR) Q4 02/03 earnings summary

Executive summary

• FY03 sales reached 21.22 million cases, up 17% YoY versus industry growth of ~8%; market share rose to 26%.

• Gilbey’s Indian and Middle East business was acquired in Dec. 2002; Gilbey’s Green Label added a brand with sales exceeding 2 million cases.

• McDowell’s No.1 portfolio crossed 10 million cases; Signature reached 21% share in its category.

Financial highlights

• Standalone revenue from operations was Rs. 14,624 million, up 14% YoY; standalone profit from operations was Rs. 415.906 million versus Rs. 397.965 million.

• Standalone profit after tax was Rs. 131.142 million versus Rs. 157.694 million; basic EPS was Rs. 2.54 versus Rs. 3.05.

• Consolidated profit after tax was Rs. 120.040 million and basic EPS was Rs. 2.22, versus Rs. 164.785 million and Rs. 3.19, respectively.

• Consolidated PBT was Rs. 300.474 million after a Rs. 12.5 million exceptional loss; PBT before the exceptional item was Rs. 312.974 million.

• Standalone net profit included a provision of nearly Rs. 7 crore for amounts due from a contract bottler whose business was taken over by Bihar Government.

Outlook and guidance

• FY04 first-quarter sales exceeded the corresponding prior-year period despite VAT-related uncertainty and the new Tax Collection at Source disrupting the initial period; operations expected to be satisfactory barring unforeseen circumstances.

• Karnataka’s wholesale government buying agency began operations on June 26, 2003, immediately lifting product sales in its first month.

• Gilbey’s Green Label acquisition was expected to add to future profitability and cash flows.