United Breweries Q3 profit declines 2.5% to Rs 106 cr

United Breweries fell 0.67% to Rs 1,334 after consolidated net profit declined 2.4% to Rs 106.68 crore in Q3 December 2019 (Q3 FY20) as against Rs 109.32 crore reported in Q3 December 2018 (Q3 FY19).

Net sales rose 0.2% year-on-year (Y-o-Y) to Rs 1,454.83 crore in Q3 FY20. The result was disclosed after market hours yesterday, 6 February 2020.

Consolidated profit before tax fell 20.2% to Rs 141.62 crore Y-o-Y. Current tax expenses fell 46.8% to Rs 38.40 crore during the period under review.

The company stated that elections and an overall economic slowdown adversely affected the alcohol industry. The new excise policy in Andra Pradesh which came into effect on October 2019 has created a significant menance to the company as well as the entire industry.

Key brands such as Kingfisher Ultra Max and Kingfisher Storm reported double digit volume growth while Amstel grew five-fold during the quarter with addition of new markets and volume gains in the existing markets.

In Q3 FY20, EBITDA dropped 10% with respect to Q3 FY19. The company's net debt stood at Rs 268 crore.

The firm continues to invest in select manufacturing sites and capex outflows for year-to-date period in the region of Rs 300 crore and has been funded through internal accruals. Interest costs were higher due to delayed payments from State Corporations, largely Andra Pradesh and duty advance demands from various states resulting in an increase in working capital.

United Breweries is engaged in the manufacture and sale of beer, including licensing of brands. The firm offers a range of brands, such as Kingfisher Premium, Kingfisher Strong, Kingfisher Ultra, Kingfisher Ultra Max, Kingfisher Blue, Bullet, Cannon 10000, Kalyani Black Label, Ub Export, Zingaro and London Pilsner.

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