United Spirits profits continue to dropBy Amy Hopkins
India’s largest drinks group United Spirits has continued to see declining profits despite its fastest growing sales volumes in more than two years.
Reporting its half year financial results, the group, owned by Diageo, said that its sales have grown 8.3% to Rs 2,178 crore and volumes had risen 8.3% to 29.7 million cases – its fastest growing since 2012.
However its net profits fell by Rs 27.83 crore (£8.6m) compared to the same period last year, impacted by costs of “exceptional items” such as the increased cost of extra neutral alcohol and the sale of its Whyte & Mackay Scotch whisky business, according to the Wall Street Journal.
Yet sales of brands in the prestige and above category grew 19% in volume terms to 9.2 million cases.
In its first quarter financial results for 2014/15, United Spirits reported a drop in sales and profits at the same time as director Paul Walsh stepped down from its board.
It was revealed in September this year that three other independent directors would step down from the board as an inquiry into loans paid out by the company gets underway.
The group had revealed a net loss of £445 million in its full-year financial results for 2013/14, which was attributed to a write down of the sale of Whyte & Mackay.
The business was initially purchased by United Spirits chairman Vijay Mallya for £525 million in 2007, but was sold to Philippines drinks group Emperador for £430m earlier this year.
United Spirits produces the world’s second-largest whisky brand McDowell’s No.1, as well as the Bagpiper and Hayward’s Fine Indian whisky brands.