United Breweries drops on reverse turnaround in Q2

United Breweries lost 3.4% to Rs 793.60 at 10:10 IST on BSE after the company reported a net loss of Rs 18.57 crore in Q2 September 2013 compared with net profit of Rs 34.20 crore in Q2 September 2012.

The Q2 result was announced after market hours on Thursday, 7 November 2013.

Meanwhile, the S&P BSE Sensex was down 83.89 points or 0.4% at 20,738.88.

On BSE, 71,000 shares were traded in the counter as against average daily volume of 89,000 shares over the past two weeks.

The stock hit a high of Rs 812 and a low of Rs 770 so far during the day.

United Breweries (UBL)'s total income fell 1.22% to Rs 848.78 crore in Q2 September 2013 over Q2 September 2012.

UBL said that the volumes in Q2 September 2013 have been under pressure, also as a result of the extended and heavy rains experienced during this year's monsoon period.

UBL said it took price increases in select markets that helped in off-setting a major portion of input price increases in an inflationary economy. However the effect of the company being forced to use new bottles for 100% of its production in Maharashtra on account of local excise laws lead to an unprecedented increase in input costs of over Rs 46 crore during the first half year, UBL said in a statement. The Maharashtra government has since reversed this policy and passed a notification in October 2013 permitting once again the use of second hand bottles which will reduce input costs to normal levels, the company added.

During the first half of the year the industry remained flat with Tamil Nadu losing 20% of its volumes on account of higher end-consumer prices and the unfavorable ordering pattern of TASMAC, which also affected the company's volumes in this state, UBL said.

The company posted double digit volume growth in Rajasthan, West Bengal, Orissa and Uttar Pradesh in first half of FY 2014.

UBL said it has maintained its all India market share of 50% despite the adverse developments in Tamil Nadu. It has increased its market share in key markets at a time when pressure from competition has been at its peak, considering the difficult times the industry has been going through, UBL said in a statement.

United Breweries is the flagship company of UB Group. With its flagship brand Kingfisher, the company is market leader in beers in India.

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