United Spirits reports Q1 sales growth

United Spirits (USL) has reported a net profit of Rs 19.92 crore for the first quarter of its financial year up to June, attributed to higher sales.

The Diageo-controlled group had experienced a net loss of Rs 61.83 crore during the same period in 2014.

USL’s overall income on a stand-alone basis rose 11.75% to Rs 2,005.54 crore during the first quarter, up Rs 1,794.6 crore from the previous year.

Volume sales during the three months leading to June were reported to be at 27.3 million cases – a rise of 2.48% compared to 27.2m cases last year.

“The company during the quarter started direct distribution/ sales of relevant Diageo brands in India,” said USl, as reported by Money Control. “This has resulted in generation of net sales revenue of Rs 42 crore during the period.

“The company is in the process of revamping its banking facilities to drive advantageous terms on borrowing, leveraging the relationship Diageo enjoys with global banks, and therefore, is already seeing a reduction in rates, which is manifested in lower costs.”

The portfolio increased by 500,000 cases in the first quarter and grew volumes 5.7%, resulting in 17.2% net sales growth, with the firm stating, “this category now represents 33% of the total sales volume of the company”.

USL also added that the Rs 128 crore reduction in interest cost was partly due to lower debts following the sale of Whyte and Mackay and the firm’s debt and interest rate management.