Capitaline

Results 29-Jul-23

Analysis

United Breweries

Capex during the quarter was Rs. 45 crore

United Breweries consolidated net sales declined 6.72% to Rs 2274.79 crore in Q1FY24 compared to Q1FY23. Sales of Beer segment has gone up 1.05% to Rs 5,243.01 crore (accounting for 100.00% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has slumped 15.25% to Rs 241.85 crore. PBIT of Beer segment fell 12.41% to Rs 257.49 crore (accounting for 106.47% of total PBIT). PBIT of Non-Alcoholic Beverages segment fell 81.86% to Rs -15.64 crore (accounting for -6.47% of total PBIT).

PBIT margin of Beer segment fell from 5.67% to 4.91%. Overall PBIT margin fell from 5.49% to 4.61%.

Operating profit margin has declined from 10.91% to 9.81%, leading to 16.18% decline in operating profit to Rs 223.09 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 54.31% to 57.46%. Purchase of finished goods cost rose from 1.44% to 1.50%. Employee cost increased from 6.12% to 6.56%. Other expenses fell from 27.26% to 24.59%.

Other income fell 0.10% to Rs 10.42 crore. PBIDT fell 15.57% to Rs 233.51 crore. Provision for interest rose 100% to Rs 1.66 crore.

PBDT fell 15.92% to Rs 231.85 crore. Provision for depreciation fell 10.80% to Rs 51.38 crore.

Profit before tax down 17.27% to Rs 180.47 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 44.13 crore, compared to Rs 55.64 crore. Effective tax rate was 24.45% compared to 25.51%.

Minority interest decreased 68.29% to Rs 0.13 crore. Net profit attributable to owners of the company decreased 15.97% to Rs 136.21 crore.

Volume in the quarter decreased 4% excl RTM changes predominantly driven by Telangana & Haryana. In Telangana, it is facing capacity constraints during peak season given the continued strong growth of the industry. The premium segment decreased 21% in the quarter whereas volumes were flat excl RTM changes. Within the segment it see mid-teens growth for Kingfisher Ultra Max & promising results for Heineken Silver in focus states. Heineken Silver is now contributing around 30% to the Heineken franchise.

Capex during the quarter was Rs. 45 crore, primarily in supply chain initiatives.

Inflationary pressure on its cost base is expected to soften in the near term but volatility will remain. UBL continues to remain optimistic about the long-term growth potential of the industry, driven by increasing disposable income, favorable demographics & premiumization.

Promoters’ stake was 72.71% as of 30 June 2023 ,compared to 72.71% as of 30 June 2022 . Promoters pledged stake was 14.45% as of 30 June 2023 ,compared to 14.45% as of 30 June 2022 .

Full year results analysis

Net sales (including other operating income) of United Breweries has increased 28.46% to Rs 7499.92 crore. Sales of Beer segment has gone up 27.09% to Rs 16,641.15 crore (accounting for 99.94% of total sales). Sales of Non-Alcoholic Beverages segment has gone down 66.73% to Rs 9.94 crore (accounting for 0.06% of total sales). YTD Volume growth of 31% was driven by Telangana, Rajasthan, Maharashtra & West Bengal

Profit before interest, tax and other unallocable items (PBIT) has slumped 6.83% to Rs 722.75 crore. PBIT of Beer segment fell 9.60% to Rs 760.09 crore (accounting for 105.17% of total PBIT). PBIT of Non-Alcoholic Beverages segment rose 42.64% to Rs -37.34 crore (accounting for -5.17% of total PBIT).

PBIT margin of Beer segment fell from 6.42% to 4.57%. PBIT margin of Non-Alcoholic Beverages segment fell from negative 217.87% to negative 375.65%. Overall PBIT margin fell from 5.91% to 4.34%.

Operating profit margin has declined from 11.93% to 8.22%, leading to 11.54% decline in operating profit to Rs 616.23 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 46.55% to 55.94%. Purchase of finished goods cost fell from 3.37% to 1.22%. Employee cost decreased from 9.00% to 7.89%. Other expenses fell from 29.10% to 26.79%.

Other income rose 65.93% to Rs 49.43 crore. PBIDT fell 8.36% to Rs 665.66 crore. Provision for interest fell 68.61% to Rs 4.64 crore. Loan funds rose to Rs 15.62 crore as of 31 March 2023 from Rs 9.74 crore as of 31 March 2022. Inventories rose to Rs 1,427.81 crore as of 31 March 2023 from Rs 935.81 crore as of 31 March 2022. Sundry debtors were higher at Rs 1,407.32 crore as of 31 March 2023 compared to Rs 1,254.86 crore as of 31 March 2022. Cash and bank balance declined from Rs 909.68 crore as of 31 March 2022 to Rs 395.29 crore as of 31 March 2023. Investments declined from Rs 8.35 crore as of 31 March 2022 to Rs 8.05 crore as of 31 March 2023.

PBDT fell 7.11% to Rs 661.02 crore. Provision for depreciation fell 3.04% to Rs 210.59 crore. Fixed assets declined from Rs 2,016.35 crore as of 31 March 2022 to Rs 1,921.71 crore as of 31 March 2023. Intangible assets stood at Rs 6.45 crore.

Profit before tax down 8.90% to Rs 450.43 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 112.63 crore, compared to Rs 128.36 crore. Effective tax rate was 26.99% compared to 25.96%.

Minority interest increased 12.90% to Rs 0.70 crore. Net profit attributable to owners of the company decreased 16.82% to Rs 303.98 crore.

Equity capital stood at Rs 26.44 crore as of 31 March 2023 to Rs 26.44 crore as of 31 March 2022. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 72.71% as of 31 March 2023 ,compared to 72.71% as of 31 March 2022 . Promoters pledged stake was 14.45% as of 31 March 2023 ,compared to 14.45% as of 31 March 2022 .

Cash flow from operating activities has turned negative Rs 119.57 crore for year ended March 2023 from positive Rs 899.62 crore for year ended March 2022. Cash flow used in acquiring fixed assets during the year ended March 2023 stood at Rs 156.28 crore, compared to Rs 173.55 crore during the year ended March 2022.

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 1569

United Breweries : Consolidated Results
Particulars	2306 (03)	2206 (03)	Var.(%)	2303 (12)	2203 (12)	Var.(%)
Net Sales	2,274.79	2,438.71	-7	7,499.92	5,838.44	28
OPM (%)	9.8	10.9		8.22	11.9
OP	223.09	266.14	-16	616.23	696.62	-12
Other Inc.	10.42	10.43	0	49.43	29.79	66
PBIDT	233.51	276.57	-16	665.66	726.41	-8
Interest	1.66	0.83	100	4.64	14.78	-69
PBDT	231.85	275.74	-16	661.02	711.63	-7
Depreciation	51.38	57.6	-11	210.59	217.19	-3
PBT	180.47	218.14	-17	450.43	494.44	-9
Share of Profit/(Loss) from Associates	0	0	-	0	0	-
PBT before EO	180.47	218.14	-17	450.43	494.44	-9
EO Income	0	0	-	-33.12	0	-
PBT after EO	180.47	218.14	-17	417.31	494.44	-16
Taxation	44.13	55.64	-21	112.63	128.36	-12
PAT	136.34	162.5	-16	304.68	366.08	-17
Minority Interest (MI)	0.13	0.41	-68	0.7	0.62	13
Net profit	136.21	162.09	-16	303.98	365.46	-17
EPS (Rs)*	#	#		12.4	13.8
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)	2306 (03)	2206 (03)	Var.(%)	% of (Total)	2303 (12)	2203 (12)	Var.(%)
Sales
Beer	100	5,243.01	5,188.74	1	100	16,641.15	13,094.04	27
Non-Alcoholic Beverages	0	0	7.34	-	0	9.94	29.88	-67
Total Reported Sales	100	5,243.01	5,196.08	1	100	16,651.09	13,123.92	27
Less: Inter segment revenues		0	0	-		0	0	-
Net Sales		5,243.01	5,196.08	1		16,651.09	13,123.92	27
PBIT
Beer	106	257.49	293.96	-12	105	760.09	840.8	-10
Non-Alcoholic Beverages	-6	-15.64	-8.6	-82	-5	-37.34	-65.1	43
Total PBIT	100	241.85	285.36	-15	100	722.75	775.7	-7
Less : Interest		-1.66	-0.83	-100		4.64	14.78	-69
Add: Other un-allcoable		-63.04	-68.05	7		-300.8	-266.48	-13
PBT		180.47	218.14	-17		417.31	494.44	-16

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