United Breweries Q4 profits rise as Britannia’s quarterly fortunes plunge 7%

INDIA –  United Breweries, one of the leading beer makers in India, has reported a consolidated net profit of Rs 97.53 crore (about US$13 million) in the fourth quarter ended March 31, riding on good volume growth in markets across the country.

This is an over two-fold jump compared to the company’s net profit of Rs 41.82 crore (aboutUS$5.6 million) achieved during the same period last year, United Breweries Ltd (UBL) said in a regulatory filing.

Consolidated total income from operations stood at Rs 3,629.75 crore (about US$487.2 million) as against Rs 3,100.67 crore (about US$416.2 million) in the same quarter previous fiscal, it added.

“All markets across the country witnessed good volume growth in Q4 barring a few key markets like Telangana, Orissa, and Delhi resulting in an overall 9 per cent growth,” UBL said.

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The company further noted that during the quarter, it witnessed double digit growth in all regions apart from the South, which recorded low single digit growth to covid excise taxation that suppressed demand.

 Despite the impressive quarterly performance, a difficult fiscal year, punctuated by alcohol bans and on trade sale restrictions weighed in on the company’s full year results.

As a result, the company’s full year consolidated net profit dropped 73% to Rs 113.83 crore (about US$15 million) as compared to Rs 428.29 crore (about US$57.46 million) recorded in the year prior.

The company said its consolidated total income from operations in FY21 was down at Rs 10,236.01 crore (US$1.3 billion) from Rs 14,660.45 crore (about US$1.96 billion) in FY20.

“It has been an exceptional year with lockdowns, prolonged trade closures and Covid related duty increases. As a result, volumes for full year were down by 39 per cent. Demand and underlying profitability saw strong sequential recovery quarter by quarter,” UBL said.

The company said it continues to focus on health and safety for its employees and stakeholders during this second wave of the pandemic. On the outlook, the company said it continues to be optimistic about the long-term growth drivers of the industry.

Britannia Industries Q4 Net profit falls 7%

Meanwhile, Britannia, the maker of Good Day and Tiger biscuits, has posted a net profit of Rs 353.46 crore (US$47.455 million) on revenue of Rs 3009.16 crore (about US$403.98 million) for the quarter ended March.

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This was a 7.26% decline in standalone net profit for the fourth quarter ended March from a year earlier, even as revenue rose 8.74%.

The Wadia-owned company had posted eight-year high sales growth during the pandemic quarter ended June, driven by at-home consumption and stockpiling but had said this expansion was difficult to maintain.

During the last quarter, the company said it shifted its focus to direct reach, rural distribution and brand building to sustain sales.

On the commodity cost front, the company noted that it witnessed sudden and steep inflation in the prices of palm oil, packing material and dairy products, probably explaining the rise in revenues and fall in profits.

Britannia said it will evaluate the long term impact to action necessary price increase, while ensuring competitiveness.

The company also revealed that implemented three transformational digital projects namely S4 HANA, an online dealer management system and an integrated vendor management system which according to the company impacted primary billing for the quarter.

The cookie maker said it will leverage the large quantum of data from the upgradation of core systems to build business intelligence and analytics.

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