United Spirits reports Q4 net loss of Rs1,799.28 crore
27 May 2015
United Spirits Ltd, India's largest maker of alcoholic beverages, has reports a lower net standalone net loss of Rs1,799 crore for the fourth quarter ended March 2015 compared to a net loss of Rs5,380 crore in the year-ago quarter.
United Spirits, now a subsidiary of UK liquor major Diageo, USL had posted a net profit of Rs74.7 crore in the third quarter of the current fiscal ended December 2014.
Total income of the company rose marginally by 5.5 per cent to Rs2,051.26 crore during the quarter from Rs1,943.34 crore a year ago, United Spirits Ltd (USL) said in a filing with the Bombay Stock exchange (BSE).
The board of directors at its meeting did not recommend any dividend on equity shares for the year ended 31 March 2015 in view of the losses, the filing added.
Total income for the quarter went up to Rs2,051.2 crore against Rs1,943.3 crore, showing a growth of 5.5 per cent year-on-year.
The company also managed to reduce its operating loss during the fourth quarter to Rs11.9 crore from Rs927 crore in the corresponding quarter last year.
The company also slightly reduced advertising spends and other promotional spending to Rs196 crore - a decline of 0.7 per cent year-on-year.
Gross margins improved by 480 basis points year-on-year.
Staff costs, however, increased by 45.3 per cent year-on-year to Rs212.3 crore. This included Rs34 crore towards provisions for its employee incentive scheme.
The company took a hit its profits for the quarter due to provisions for loans, advances and investments in its subsidiaries, all aggregating to Rs716 crore.
Provision for loans and investments in relation to Whyte and Mackay Group (WMG) was Rs184.85 crore while loss on sale of shares of a subsidiary was Rs10.85 crore.
Provision for a loan to a related party aggregated to Rs995.46 crore and profit on sale of manufacturing unit was Rs35.65 crore.
During the fourth quarter ended March 2015, the company made a foreign exchange gain of Rs 8.7 crore as against forex loss of Rs7.8 crore in the year-ago quarter.
Further to Diageo Plc's undertakings offered to UK's Office of Fair Trade (OFT), which is now called Competition and Markets Authority, UK, in January 2014, the company's board of directors decided to initiate a process to explore a potential sale of all or part of Whyte and Mackay.
On 31 October 2014, USGBL completed the sale of the entire issued share capital of WMG to Emperador UK Limited as per the 9 May 2014 agreement, which valued Whyte and Mackay Group Limited at 430 million pounds. With the sale, WMG and its 45 subsidiaries have ceased to be subsidiaries of the company.
Part of the proceeds from the sale was used to repay Whyte and Mackay acquisition debt amounting to £370 million.
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