India: United Breweries reports profit in Q3

India's United Breweries reported a profit in the third quarter on February 8, as improved demand helped mitigate the impact of higher costs.

The company, partly owned by Dutch brewer Heineken NV has been grappling with elevated costs due to rising raw material prices, including glass and extra neutral alcohol (ENA), a primary raw material for alcoholic beverages, which have incrementally risen each quarter.

The Kingfisher beer maker reported a standalone profit of 848.5 million rupees (nearly $10 million) for the quarter ended Dec. 31, compared with a loss of 21.4 million rupees a year earlier.
Revenue from operations rose 12.3% to 41.53 billion rupees.

However, total expenses also grew at a similar pace to 40.61 billion rupees, dragged by a 14% rise in raw material costs.

United Breweries' revenue growth has also been decelerating, dropping from 96% in June 2022, when beer sales surged during the summer months, to 14.1% in September 2023, as consumers reduced spending amid persistent inflation.

Profit has declined in the last three quarters since swinging to a loss in the December quarter of fiscal 2023.

Meanwhile, rivals Radico Khaitan, known for 'Magic Moments' vodka, and 'Smirnoff' vodka maker United Spirits reported an increase in third-quarter profits, both benefitting from strong sales of their premium liquor brands.

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