United Spirits, the flagship spirits company of the Bangalore-based UB Group, on Saturday reported a net profit of Rs 145 crore for the quarter ended June, a five per cent rise compared with the Rs 138-crore net profit reported in the year-ago period. The company’s total income rose 6.6 per cent to Rs 2,073 crore, against Rs 1,944 crore in the corresponding period last year.
Operating profit for the quarter rose two per cent to Rs 334 crore, against Rs 327 crore in the corresponding quarter last year. Interest costs rose to Rs 165.56 crore, compared with Rs 130.20 crore in the year-ago period, owing to increased borrowings for working capital and rate increases by lenders.
During the quarter, the company sold 31.27 million cases of spirits, a rise of two per cent over the corresponding quarter last year. “What is heartening is the growth in what the industry refers to as ‘prestige’ and ‘above brands’, or the premium segments, which rose a sharp 17 per cent to about eight million cases, 1.2 million cases more than those sold in the comparable quarter of the previous financial year,” read a company statement.
The key markets of Tamil Nadu and West Bengal continued to dampen the company’s performance during the quarter. An artificially-imposed limit on United Spirits sales, against demand for the company’s brands, saw volumes being restricted to about 70 per cent of its capacity. While the company’s products in Tamil Nadu continued to be readily sold whenever available, the artificial embargo ensured demand was not fully met. “While things have partially improved from the second half of the last financial year, we are nowhere close to utilising our full capacity,” the statement added.
Spirit costs fell about Rs 6 per case from average prices in 2011-12 and about Rs 12 per case compared to prices in the second half of the previous financial year. However, these rose by Rs 4 a case compared to the year-ago period.
“Unless state governments intervene in the process of trading molasses and spirits, we expect spirit prices would be benign this year,” the company stated.