UBL profit up 53% in March quarter

United Breweries Ltd (UBL), the beer company of Vijay Mallya’s UB Group, has posted a 53 per cent rise in net profit to Rs 40 crore in the fourth quarter of 201-11, as compared with Rs 26.1 crore in the same period last year.

The rise is attributed to a one-time income of Rs 20.9 crore during the quarter, along with sound growth in sales numbers. Net sales rose 46.5 per cent to Rs 839.5 crore during this period as compared with Rs 573.15 crore last year.

Operating profit increased 80.5 per cent to Rs 71.6 crore against Rs 39.7 crore in the same period last year. The company registered a 73 per cent rise in net profit in 2010-11 to Rs 168 crore as compared with Rs 97 crore in 2009-10. It also posted other income of Rs 73.1 crore in 2010-11, contributing to the overall net numbers. Net sales rose 41 per cent to Rs 2,778.8 crore in 2010-11 against Rs 1,973.1 crore reported in 2009-10.

“UBL had a sound 2010-11, with volumes growing at the highest rate in the last four years. Sales volume has increased by 23 per cent, driven by 27 per cent growth in strong beer and 16 per cent increase in mild volumes against an industry average of nine per cent,” the company said.

It increased its market share due to the rise in sales numbers. “For the full year, our market share stands at 54 per cent against 51 per cent in the corresponding period last year,” it said. Similarly, it attained market share of 56 per cent during the fourth quarter (January-March) of 2010-11.

“During the year, the company achieved market leadership in Andhra Pradesh for the first time and extended its position in Orissa and Uttar Pradesh,” it added. And, that its performance was primarily driven by growth in Maharashtra, Karnataka and the eastern markets.

EXPANSION
It sold 100 million cases (one case is nine litres) in 2009-10. It is aiming to touch 200 million cases in the next three years. It is expanding its manufacturing facility through acquisition and setting up of new breweries to meet the increasing demand for its products.

“We are planning to introduce greenfield (new) breweries in Nanjangud, Karnataka, along with one in Bihar. We will expand our existing capacity in Orissa, Kalyani, Aurangabad in Maharashtra (two units) and Hyderabad (three units) in the near future. With these planned capacities, our present capacity will go up to 16 million cases per month from 12.6 million cases in the current calender,” Kalyan Ganguly, managing director of UBL, had told Business Standard in an earlier interview.

The company has planned to invest Rs 700 crore in capacity expansion and is in talks with various state governments to cultivate barley for captive sourcing. “Presently, we meet 15 per cent of our demand for barley from captive sources. We plan to raise it to 35 per cent in the near future,” Ganguly added.