United Spirits Q4 curbed by higher costs; profit up 2%

United Spirits Q4 curbed by higher costs; profit up 2%

Bangalore: United Spirits Ltd (USL), which earlier in April became the world’s second largest liquor company by volume, saw its quarterly profit growth curbed by higher costs.

Net profit in the three months to 31 March increased 2.2% to Rs56.85 crore though sales jumped 37.93% to Rs1,252.14 crore, the company said in a statement on Wednesday. Total expenditure at the spirits arm of the Vijay Mallya-owned UB Group, with brands such as McDowell’s No.1 whisky, rose 40.1% to Rs1,082.22 crore in the fourth quarter. Raw material costs such as that of molasses stiffened by 48.48% to Rs340.36 crore.

Advertisement and sales promotion costs shot up 88.3% to Rs149.84 crore on account of a change in accounting and promotional activities around the Indian Premier League and the McDowell Derby.

Interest costs rose 82% to Rs102.26 crore primarily on account of refinancing of foreign currency debt incurred for the acquisition of Scottish distillery Whyte & Mackay into a rupee loan. This conversion incurred an upfront fee of Rs13 crore. USL’s fourth-quarter profit is 41.3% lower than in the preceding three months, for which it had posted earnings of Rs96.85 crore.