United Breweries Q1 net profit dips 16% to Rs 136.34 cr, sales at Rs 5,243 cr

New Delhi: Beer maker United Breweries Ltd has reported a 16.09 per cent decline in consolidated net profit at Rs 136.34 crore for the first quarter ended June 2023, as volumes were impacted by supply challenges, lower inter-state sales and persisting inflation.

The company, controlled by Dutch multinational brewing company Heineken NV, had posted a net profit of Rs 162.50 crore in the April-June quarter a year ago, United Breweries Ltd (UBL) said in a late-night regulatory filing on Friday.

UBL's revenue from operations was almost flat to Rs 5,243.01 crore during the quarter under review. It stood at Rs 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 Rs 5,072.96 crore, up 1.69 per cent in the first quarter of FY 2023-24, as against Rs 4,988.37 crore a year ago.

Its total income in the June quarter was at Rs 5,253.43 crore.

"Capex during the quarter was Rs 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.