INDIA: United Breweries gains beer share but Q1 profits dip
- Q1 net profits drop by 6.7% to INR710.4m (US$16m)
- Net sales rise by 23% to INR9.44bn
- Operating profits dip by 1.4% to INR1.12bn
- Kingfisher brewer claims higher market share, profits hit by higher costs
United Breweries gains beer market share in Q1
United Breweries has said that its share of the Indian beer market surpassed 50% in the first quarter of its fiscal year, but higher costs damaged group profits.
United Breweries' volume share of the fledgling Indian beer sector hit 53% for the three months to the end of June, up from 49% in the same period of last year, the group said yesterday (9 August). Its volume sales rose by 6% for the period, while net sales jumped by 23% to INR9.44bn.
Kingfisher lager continued to perform well for the brewer, which is controlled by Vijay Mallya's UB Group and 37.5%-owned by Heineken. The first batches of Heineken lager also hit the market in 65cl and 33cl bottles during the quarter.
"Sales volumes in the markets of Andhra Pradesh, Rajasthan, Uttar Pradesh, Goa and Karnataka showed good growth during the quarter," United Breweries said.
However, higher selling costs and interest payments prevented the group from converting its strong sales momentum into profits growth. Net profits fell by almost 7% for the three-month period, to INR710.4m, with operating profits down by 1.4% to INR1.12bn.
Over the longer-term, the firm said that it will benefit from lower bottling costs thanks to the development of its own supply of UB-patented bottles. So far, these bottles have only been launched in a few areas.
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