UNITED BREWERIES 2017-18 Annual Report Analysis

Sat, 31 Mar

UNITED BREWERIES has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

UNITED BREWERIES Income Statement Analysis

• Operating income during the year rose 54.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 40.5% YoY during the fiscal. Operating profit margins witnessed a growth and down at 75.6% in FY18 as against 83.2% in FY17.
• Depreciation charges decreased by 9.5% and finance costs decreased by 18.8% YoY, respectively.
• Other income declined by 74.7% YoY.
• Net profit for the year grew by 71.6% YoY.
• Net profit margins during the year declined from 29.8% in FY17 to 33.1% in FY18.

UNITED BREWERIES Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	-7,714	-11,926	54.6%
Other income	Rs m	520	131	-74.7%
Total Revenues	Rs m	-7,195	-11,795	63.9%
Gross profit	Rs m	6,419	9,020	40.5%
Depreciation	Rs m	2,871	2,597	-9.5%
Interest	Rs m	587	477	-18.8%
Profit before tax	Rs m	3,481	6,078	74.6%
Tax	Rs m	1,182	2,132	80.3%
Profit after tax	Rs m	2,299	3,946	71.6%
Gross profit margin	%	-83.2	-75.6
Effective tax rate	%	34.0	35.1
Net profit margin	%	-29.8	-33.1

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UNITED BREWERIES Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 18 billion as compared to Rs 19 billion in FY17, thereby witnessing an decrease of -5.6%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY17, a growth of 11.4%.
• Current assets rose 12% and stood at Rs 26 billion, while fixed assets fell 1% and stood at Rs 21 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 47 billion as against Rs 45 billion during FY17, thereby witnessing a growth of 5%.

UNITED BREWERIES Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	23,342	26,903	15.3
Current Liabilities	Rs m	19,030	17,970	-5.6
Long-term Debt	Rs m	1,840	2,050	11.4
Total Liabilities	Rs m	44,787	47,234	5.5
Current assets	Rs m	23,653	26,405	11.6
Fixed Assets	Rs m	21,134	20,829	-1.4
Total Assets	Rs m	44,787	47,234	5.5

UNITED BREWERIES Cash Flow Statement Analysis

• UNITED BREWERIES's cash flow from operating activities (CFO) during FY18 stood at Rs 6 billion, an improvement of 3.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 27 million from the Rs 93 million net cash flows seen during FY17.

UNITED BREWERIES Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	5,441	5,633	3.5%
Cash Flow from Investing Activities	Rs m	-2,336	-1,970	-
Cash Flow from Financing Activities	Rs m	-3,012	-3,635	-
Net Cash Flow	Rs m	93	27	-70.5%

Current Valuations for UNITED BREWERIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.9, an improvement from the EPS of Rs 8.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 947.2, stands at 63.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.3 times, while the price to sales ratio stands at -21.0 times.
• The company's price to cash flow (P/CF) ratio stood at 39.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	-29.2	-45.1
TTM Earnings per share	Rs	8.7	14.9
Diluted earnings per share	Rs	8.7	14.9
Price to Cash Flow	x	39.4	39.6
TTM P/E ratio	x	88.8	63.6
Price / Book Value ratio	x	9.4	9.6
Market Cap	Rs m	220,183	258,919
Dividends per share (Unadj.)	Rs	1.2	2.0

Ratio Analysis for UNITED BREWERIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY18, from 1.2x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 13.8x during FY18, from 6.9x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 14.7% during FY18, from 9.9% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 22.6% during FY18, from 16.2% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 9.4% during FY18, from 6.4% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.2	1.5
Debtors’ Days	Days	-6,129	-4,587
Interest coverage	x	6.9	13.8
Debt to equity ratio	x	0.1	0.1
Return on assets	%	6.4	9.4
Return on equity	%	9.9	14.7
Return on capital employed	%	16.2	22.6

To see how UNITED BREWERIES has performed over the last 5 years, please visit here.

UNITED BREWERIES Share Price Performance

Over the last one year, UNITED BREWERIES share price has moved up from Rs 770.6 to Rs 947.2, registering a gain of Rs 176.6 or around 22.9%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for UNITED BREWERIES and quarterly results for UNITED BREWERIES)

Read: Latest Annual Report Analysis of UNITED BREWERIES