United Breweries' net falls by 1.5% to Rs 54.2 cr

On standalone basis, however, UBL reported a fall of 4 per cent at Rs 62.47 crore for the financial year ending March 31, 2008 from Rs 65.09 crore in the comparable period last year. Total income during the period jumped 39 per cent to Rs 1366.38 crore from Rs 981.83 crore.

The company termed the year as "difficult for operating environment." Input costs particularly in respect of barley, hops, glass and energy have risen sharply but it has neutralised the negative impact through improved manufacturing efficiencies and technological upgradation such as the change over from oil fired boilers to bio mass boilers at breweries.

The state government's continued punitive taxation and revenue policies resulted into sharp increases in end consumer prices particularly in the sates of Andhra Pradesh and Tamil Nadu.

Buoyed by massive investments in the kingfishers brand, Kingfisher Premium set a new all time record with sales of over 25 million cases. This was complicated with the launch of Kingfisher draught in attractively packaged cans.

In yet another step towards achieving cost reduction and secure supplies of malt, a critical raw material, UBL acquired 51 per cent stake in Maltex Maltsters Ltd. Further investments are planned to expand the production capacity at this strategic unit.

Millennium Alcobev Pvt Ltd (MAPL), being a joint venture (JV) between UBL and Scottish & Newcastle plc. has already made significant inroads into the market by achieving a 10 per cent market share within a period of three years. The JV has its manufacturing locations in critical markets and meets almost 30 per cent of the company's capacity requirement.

The company has adopted a turn-around strategy for the JV operations which has involved in operational merger of the businesses. This has led to a rationalisation or spend, a repositioning or the combined brands, restructuring the debt profile or the JV in order to reduce the cost of borrowing, all of which generated positive earning before interest, depreciation and taxes for the quarter.

The brewing capacities have been expanded in all the entities in line with the growth in the business by infusing additional funds. The company continues to consider that the investments are strategic and long term in nature and substantial benefits are expected to accrue to the JV in terms or market share and capacity utilisation.

The JV companies for the last two years have made cash profits and financials are improving. The management is of the view that there is no permanent diminution in the value or investments and no provision, therefore, is considered necessary at this stage.

In view of the amalgamation or Karnataka Breweries and Distilleries Ltd (KBDL) a wholly owned subsidiary into the company, the figures for the current quarter are not comparable with the figures of the corresponding quarter in the previous year.