Results     10-Feb-23
Analysis
United Breweries
Inflationary pressure impacted margins and profits
United Breweries consolidated net sales increased 1.91% to Rs 1613.02 crore in Q3FY23 compared to Q3FY22.  Sales of Beer segment has gone up 5.61% to Rs 3,700.28 crore (accounting for 99.99% of total sales).  Sales of Non-Alcoholic Beverages segment has gone down 97.39% to Rs 0.21 crore (accounting for 0.01% of total sales). 

Volume growth of 4% in the quarter vs prior year was primarily driven by Telangana, Rajasthan and Karnataka.

Profit before interest, tax and other unallocable items (PBIT) has slumped 49.56% to Rs 103.86 crore.  PBIT of Beer segment fell 45.32% to Rs 125.87 crore (accounting for 121.19% of total PBIT).  PBIT of Non-Alcoholic Beverages segment rose 9.46% to Rs -22.01 crore (accounting for -21.19% of total PBIT). 

PBIT margin of Beer segment fell from 6.57% to 3.40%.  PBIT margin of Non-Alcoholic Beverages segment fell from negative 301.99% to negative 10,480.95%.  Overall PBIT margin fell from 5.86% to 2.81%. 

Operating profit margin has declined from 11% to 4.78%, leading to 55.77% decline in operating profit to Rs 77.04 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 46.30% to 55.54%.   Purchase of finished goods cost fell from 3.28% to 1.97%.   Employee cost decreased from 9.38% to 9.13%.   Other expenses fell from 29.98% to 28.53%.  

Gross margin during the quarter was lower by 813 bps as compared to 2021 due to continued inflationary pressures on costs, particularly on prices of barley and packaging material.

Other income rose 112.89% to Rs 13.05 crore.  PBIDT fell 50.03% to Rs 90.09 crore.  Provision for interest fell 56.64% to Rs 1.6 crore. 

PBDT fell 49.90% to Rs 88.49 crore.  Provision for depreciation fell 5.28% to Rs 50.23 crore. 

Profit before tax down 69.04% to Rs 38.26 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 6.95 crore, compared to Rs 32.56 crore.  Effective tax rate was 135.21% compared to 26.35%.

Minority interest decreased 30.43% to Rs 0.16 crore.  The company reported net loss of Rs 1.97 crore compared to profit of Rs 90.79 crore. 

The premium segment recorded growth ahead of the total portfolio, growing 13% in the quarter with a strong 75% growth YTD, driven by Heineken and Kingfisher Ultra & Max.

Price increases have been taken in a multiple of states and the company continues to pursue options of further price increases to mitigate gross margin erosion. Inflationary pressure on costs is seen to continue in the near term. The company will seek to take appropriate actions to further mitigate the impact as far as possible. UBL continues to remain optimistic on the long-term growth of the industry, driven by rising prosperity, youthful population and evolving consumer trends driving premiumization.

Capex YTD was a spend of Rs.113 crore, and with continued volume growth, Capex investments are planned to meet the expected volume expansion.

Promoters’ stake was 72.71% as of 31 December 2022 ,compared to 72.71% as of 31 December 2021 .  Promoters pledged stake was 14.97% as of 31 December 2022 ,compared to 14.45% as of 31 December 2021 . 

For year-to-date (YTD) results analysis

Net sales (including other operating income) of United Breweries has increased 38.86% to Rs 5734.04 crore.  Sales of Beer segment has gone up 33.13% to Rs 12,561.24 crore (accounting for 99.93% of total sales).  Sales of Non-Alcoholic Beverages segment has gone down 62.97% to Rs 8.84 crore (accounting for 0.07% of total sales). 

YTD Volume growth was 43% driven by Rajasthan, West Bengal, Telangana and Maharashtra.

Profit before interest, tax and other unallocable items (PBIT) has jumped 28.95% to Rs 628.20 crore.  PBIT of Beer segment rose 23.45% to Rs 662.88 crore (accounting for 105.52% of total PBIT).  PBIT of Non-Alcoholic Beverages segment rose 30.39% to Rs -34.68 crore (accounting for -5.52% of total PBIT). 

PBIT margin of Beer segment fell from 5.69% to 5.28%.  PBIT margin of Non-Alcoholic Beverages segment fell from negative 208.71% to negative 392.31%.  Overall PBIT margin fell from 5.15% to 5.00%. 

Operating profit margin has declined from 10.54% to 9.81%, leading to 29.29% rise in operating profit to Rs 562.60 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 45.68% to 54.22%.   Purchase of finished goods cost fell from 3.60% to 1.44%.   Employee cost decreased from 9.69% to 7.57%.   Other expenses fell from 30.40% to 26.99%.  

Other income rose 124.85% to Rs 37.64 crore.  PBIDT rose 32.83% to Rs 600.24 crore.  Provision for interest fell 72.15% to Rs 3.42 crore. 

PBDT rose 35.76% to Rs 596.82 crore.  Provision for depreciation fell 2.49% to Rs 159.87 crore. 

Profit before tax grew 58.51% to Rs 436.95 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 109.02 crore, compared to Rs 73.36 crore.  Effective tax rate was 27.00% compared to 26.61%.

Minority interest increased 166.67% to Rs 0.64 crore.  Net profit attributable to owners of the company increased 45.59% to Rs 294.17 crore. 

Promoters’ stake was 72.71% as of 31 December 2022 ,compared to 72.71% as of 31 December 2021 .  Promoters pledged stake was 14.97% as of 31 December 2022 ,compared to 14.45% as of 31 December 2021. 

Full year results analysis

Net sales of United Breweries have increased 37.60% to Rs 5838.44 crore.  Sales of Beer segment has gone up 28.92% to Rs 13,094.04 crore (accounting for 99.77% of total sales).  Sales of Non-Alcoholic Beverages segment has gone up 3.36% to Rs 29.88 crore (accounting for 0.23% of total sales). 

Operating profit margin has jumped from 8.98% to 11.93%, leading to 82.81% rise in operating profit to Rs 696.62 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 46.21% to 46.55%.   Purchase of finished goods cost rose from 1.73% to 3.37%.   Employee cost decreased from 11.42% to 9.00%.   Other expenses fell from 31.68% to 29.10%.  

Other income fell 40.72% to Rs 29.79 crore.  PBIDT rose 68.42% to Rs 726.41 crore.  Provision for interest fell 34.80% to Rs 14.78 crore.  Loan funds declined from Rs 261.97 crore as of 31 March 2021 to Rs 9.74 crore as of 31 March 2022.  Inventories declined from Rs 1,136.68 crore as of 31 March 2021 to Rs 935.81 crore as of 31 March 2022.  Sundry debtors were lower at Rs 1,254.86 crore as of 31 March 2022 compared to Rs 1,394.99 crore as of 31 March 2021.  Cash and bank balance rose to Rs 909.68 crore as of 31 March 2022 from Rs 469.28 crore as of 31 March 2021.  Investments rose to Rs 8.35 crore as of 31 March 2022 from Rs 6.06 crore as of 31 March 2021 . 

PBDT rose 74.15% to Rs 711.63 crore.  Provision for depreciation fell 6.39% to Rs 217.19 crore.  Fixed assets declined from Rs 2,071.80 crore as of 31 March 2021 to Rs 2,016.35 crore as of 31 March 2022.  Intangible assets stood at Rs 6.45 crore. 

Profit before interest, tax and other unallocable items (PBIT) has jumped 67.13% to Rs 775.70 crore.  PBIT of Beer segment rose 67.31% to Rs 840.80 crore (accounting for 108.39% of total PBIT).  PBIT of Non-Alcoholic Beverages segment fell 69.49% to Rs -65.10 crore (accounting for -8.39% of total PBIT). 

PBIT margin of Beer segment rose from 4.95% to 6.42%.  PBIT margin of Non-Alcoholic Beverages segment fell from negative 132.86% to negative 217.87%.  Overall PBIT margin rose from 4.56% to 5.91%. 

Profit before EO grew 179.93% to Rs 494.44 crore.  The company reported nil EO items during the period compared to net EO expense of Rs 7.22 crore. PBT after EO was up 192% to Rs 494.44 crore. Provision for tax was expense of Rs 128.36 crore, compared to Rs 55.58 crore.  Effective tax rate was 25.96% compared to 32.81%.

Minority interest increased 1.64% to Rs 0.62 crore.  Net profit attributable to owners of the company increased 222.79% to Rs 365.46 crore. 

Equity capital stood at Rs 26.44 crore as of 31 March 2022 to Rs 26.44 crore as of 31 March 2021.  Per share face Value remained same at Rs 1.00. 

Promoters’ stake was 72.71% as of 31 March 2022 compared to 57.72% as of 31 March 2021.  Promoters pledged stake was 14.45% as of 31 March 2022 compared to 18.20% as of 31 March 2021. 

The scrip is currently trading at Rs 1479 

 

United Breweries : Consolidated Results

Particulars

2212 (03)

2112 (03)

Var.(%)

2212 (09)

2112 (09)

Var.(%)

2203 (12)

2103 (12)

Var.(%)

Net Sales

1,613.02

1,582.79

2

5,734.04

4,129.27

39

5,838.44

4,243.09

38

OPM (%)

4.78

11

 

9.81

10.54

 

11.93

8.98

 

OP

77.04

174.17

-56

562.6

435.15

29

696.62

381.06

83

Other Inc.

13.05

6.13

113

37.64

16.74

125

29.79

50.25

-41

PBIDT

90.09

180.3

-50

600.24

451.89

33

726.41

431.31

68

Interest

1.6

3.69

-57

3.42

12.28

-72

14.78

22.67

-35

PBDT

88.49

176.61

-50

596.82

439.61

36

711.63

408.64

74

Depreciation

50.23

53.03

-5

159.87

163.95

-2

217.19

232.01

-6

PBT

38.26

123.58

-69

436.95

275.66

59

494.44

176.63

180

Share of Profit/(Loss) from Associates

0

0

-

0

0

-

0

0

-

PBT before EO

38.26

123.58

-69

436.95

275.66

59

494.44

176.63

180

EO Income

-33.12

0

-

-33.12

0

-

0

-7.22

-

PBT after EO

5.14

123.58

-96

403.83

275.66

47

494.44

169.41

192

Taxation

6.95

32.56

-79

109.02

73.36

49

128.36

55.58

131

PAT

-1.81

91.02

PL

294.81

202.3

46

366.08

113.83

222

Minority Interest (MI)

0.16

0.23

-30

0.64

0.24

167

0.62

0.61

2

Net profit

-1.97

90.79

PL

294.17

202.06

46

365.46

113.22

223

P/(L) from discontinued operations net of tax

0

0

-

0

0

-

0

0

-

Net profit after discontinued operations

-1.97

90.79

PL

294.17

202.06

46

365.46

113.22

223

EPS (Rs)*

#

#

 

#

#

 

13.8

4.5

 

Notes

* EPS is on current equity of Rs 26.44 crore, Face value of Rs 1, Excluding extraordinary items.

# EPS is not annualised

bps : Basis points

EO : Extraordinary items

Figures in Rs crore

Source: Capitaline Corporate Database

 

 

United Breweries : Consolidated Segment Results

 

% of (Total)

2212 (03)

2112 (03)

Var.(%)

% of (Total)

2212 (09)

2112 (09)

Var.(%)

% of (Total)

2203 (12)

2103 (12)

Var.(%)

Sales

 

 

 

 

Beer

100

3,700.28

3,503.80

6

100

12,561.24

9,435.34

33

100

13,094.04

10,156.85

29

Non-Alcoholic Beverages

0

0.21

8.05

-97

0

8.84

23.87

-63

0

29.88

28.91

3

Total Reported Sales

100

3,700.49

3,511.85

5

100

12,570.08

9,459.21

33

100

13,123.92

10,185.76

29

Less: Inter segment revenues

 

0

0

-

 

0

0

 

0

0

-

 

Net Sales

 

3,700.49

3,511.85

5

 

12,570.08

9,459.21

33

 

13,123.92

10,185.76

29

PBIT

 

 

 

 

Beer

121

125.87

230.2

-45

106

662.88

536.97

23

108

840.8

502.54

67

Non-Alcoholic Beverages

-21

-22.01

-24.31

9

-6

-34.68

-49.82

30

-8

-65.1

-38.41

-69

Total PBIT

100

103.86

205.89

-50

100

628.2

487.15

29

100

775.7

464.13

67

Less : Interest

 

1.6

3.69

-57

 

3.42

12.28

-72

 

14.78

22.67

-35

Add: Other un-allcoable

 

-97.12

-78.62

-24

 

-220.95

-199.21

-11

 

-266.48

-272.05

2

PBT

 

5.14

123.58

-96

 

403.83

275.66

47

 

494.44

169.41

192

 

 

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