UBL skids after weak Q4 outcome

United Breweries (UBL) slipped 1.57% to Rs 1035.35 after the company's net profit tumbled 39.2% to Rs 41.58 crore on 12.6% decline in net sales to Rs 1425.11 crore in Q4 March 2020 over Q4 March 2019.

Profit before tax in Q4 FY20 stood at Rs 55.59 crore, down by 48.2% from Rs 107.42 crore in Q4 FY19. Current tax expenses fell 21.3% to Rs 25.89 crore in the fourth quarter from Rs 32.91 crore in the same period last year.

During the quarter, revenue from the beer segment was at Rs 3,095.25 crore (down 10.40% YoY) and Rs 4.66 crore from non-alcoholic beverages (down 7.17% YoY).

Consolidated net profit fell 24% to Rs 427.73 crore while net sales remained almost flat at Rs 6,509.24 in the year ended March 2020 (FY20) over the year ended March 2019 (FY19). PBT was at Rs 568.92 crore in FY20, down by 35.3% from Rs 879.31 crore in FY19.

"COVID-19 impacted performance in the March Quarter 2020. The full year performance was negatively impacted by elections in Q1, overall economic slowdown, unfavorable policy changes in Andhra Pradesh and input cost increases. The price increases taken by the company in the markets of Karnataka, Maharashtra, Rajasthan and Goa helped partially offset increased input prices of barley and new glass bottles resulting in less than 2% reduction in gross margin. In Q4 gross margin increased marginally due to a combination of positive price/mix and more stable input costs.

Interest costs remained flat and the net debt stood at Rs. 217 Cr. The focus on working capital management and the conservation of cash helped in funding the entire capex program of Rs. 402 Cr, out of internal accruals without resorting to any term borrowing, the company said in a statement.

United Breweries (UBL) is engaged in the manufacture and sale of beer.

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