United Breweries Ltd, the beer manufacturer, has recorded a 16.09% decrease in its consolidated net profit for the first quarter of June 2023, amounting to INR 136.34 crore. The decline can be attributed to several factors, including supply challenges, reduced inter-state sales, and the ongoing inflation, which collectively affected the company’s volumes during the period.
In a regulatory filing on Friday, United Breweries Ltd (UBL) revealed that the company, which is under the control of the Dutch multinational brewing company Heineken NV, had recorded a net profit of INR 162.50 crore in the April-June quarter of the previous year.
UBL’s revenue from operations was almost flat to INR 5,243.01 crore during the quarter under review. It stood at INR 5,196.08 crore in the corresponding period of FY22.
“Q1 volumes impacted by RTM (root to market) changes, supply challenges & lower inter-state sales,” said an earning presentation from UBL.
It had a volume decline of 12 per cent in the June quarter driven by Tamil Nadu, Andhra Pradesh, Delhi and Haryana. In the premium segment, the volume decline was 21 per cent.
“Gross Profit predominantly impacted by volume decline & COGS (Cost of Goods Sold) inflation with GP margin 369bps down,” it said.
Besides, it has price increases in key markets including Rajasthan, Uttar Pradesh and Karnataka.
UBL’s total expenses were at INR 5,072.96 crore, up 1.69 per cent in the first quarter of FY 2023-24, as against INR 4,988.37 crore a year ago.
Its total income in the June quarter was at INR 5,253.43 crore.
“Capex during the quarter was INR 45 crore, primarily in supply chain initiatives,” said UBL’s earning statement.
Over the outlook, UBL said inflationary pressure on the cost base is expected to soften in the near-term but volatility will remain.
“We continue to focus on revenue management and cost initiatives, to drive margin accretion,” it said.
It is building further category growth while driving the share of premium in its portfolio remains a key focus
“We remain optimistic on the long-term growth potential of the industry, driven by increasing disposable income, favourable demographics and premiumisation,” said UBL.