United Spirits net profit rises 68% to US$35m in the second quarter

INDIA – India’s leading liquor company United Spirits Limited (USL) has reported a 68.97% increase in net profit to US$35.44 million attributed to improved sales in the second quarter ended September 2018.

In the corresponding period July to September last year, the company which claims to be the world’s second-largest spirits company by volume had posted a net profit of US$20.96 million.

Revenue from operations during the quarter under review was at US$976 million, up 14.70% compared to US$851 million in the corresponding quarter of the previous fiscal.

“Reported net sales increased 14% delivered through the continued strong performance of the Prestige and Above segment, an improved performance in the popular segment as well as benefitting from lapping the impact of the highway ban in the same period last year,” said the company in a regulatory filing.

Total expenses were at US$927.62 million as against US$821 million, up 12.95%.

Commenting on the results, USL CEO Anand Kripalu said, “We have delivered robust gross margin improvement both in the quarter as well as the first half, driven mainly by savings from our productivity programme which more than offset the adverse impact of inflation.”

In the first quarter, the alcoholic beverages firm, which is also a subsidiary of Diageo reported 29% increase in profits to US$11.80 million helped by strong growth in premium alcohol segment.

For the three months ended 30 June, net sales rose by 13% attributed to strong performance in the company’s focus brands, Prestige and Above while net sales excluding the one-off impact of operating model changes increased 14%.

Its Prestige and Above segment include brands such as McDowell’s No 1 whiskey, Royal Challenge, and Signature, which performed well during the quarter.

Looking into 2018, the firm had said it will continue to focus on premiumisation, brand strengthening and driving productivity with a medium-term ambition to deliver double digit top line growth and improve margins to mid-high teens.

By 2017, Diageo whose iconic brands include Smirnoff, Johnnie Walker, Baileys and Guinness had a 55% stake in USL and was considering to raise its majority stake in the Indian whisky producer.

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