United Breweries (UBL) slipped 3.66% to Rs 1,492.55 after the company reported a consolidated net loss of Rs 1.97 crore in Q3 FY23 from a net profit of Rs 90.79 crore in Q3 FY22.
Net sales rose marginally to Rs 1,613.02 crore in Q3 FY23 as against Rs 1,582.79 crore recorded in the same period a year ago.
Profit before exceptional items and tax tumbled 69.04% year on year (YoY) to Rs 38.26 crore in Q3 FY23. The company reported exceptional items of Rs 33.12 crore in Q3 FY23.
Total expenses rose 8.27% YoY to Rs 3,675.28 crore in Q3 FY23. Cost of materials consumed stood at Rs 886.32 crore (up 21.62% YoY) and employee benefits expense was at Rs 103.35 crore (up 6.41% YoY) during the period under review.
The volume growth stood at 4% in Q3 FY23, primarily driven by Telangana, Rajasthan and Karnataka.
The company said that the premium segment recorded growth ahead of the total portfolio, growing 13% in the quarter with a strong 75% growth year to date (YTD), driven by Heineken and Kingfisher Ultra & Max.
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Gross margin during the quarter was lower by 813 bps, due to continued inflationary pressures on costs, particularly on prices of barley and packaging material.
The brewing company said that the price increases have been taken in a multiple of states and the company continues to pursue options of further price increases to mitigate gross margin erosion.
The firm's capex YTD was at Rs 113 crore, and with continued volume growth, capex investments are planned to meet the expected volume expansion, it added.
Inflationary pressure on costs is seen to continue in the near term. The company will seek to take appropriate actions to further mitigate the impact as far as possible. UBL continues to remain optimistic on the long-term growth of the industry, driven by rising prosperity, youthful population and evolving consumer trends driving premiumization, United Breweries stated in the press release.
United Breweries, controlled by Dutch multinational company Heineken NV, is primarily engaged in the manufacture, purchase, and sale of beer and non-alcoholic beverages.
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