UNITED BREWERIES 2018-19 Annual Report Analysis

Sun, 31 Mar

UNITED BREWERIES has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

UNITED BREWERIES Income Statement Analysis

• Operating income during the year fell 0.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.2% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 95.7% in FY19 as against 75.6% in FY18.
• Depreciation charges increased by 0.1% and finance costs decreased by 34.5% YoY, respectively.
• Other income grew by 143.8% YoY.
• Net profit for the year grew by 42.7% YoY.
• Net profit margins during the year declined from 33.1% in FY18 to 47.4% in FY19.

UNITED BREWERIES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	-11,926	-11,890	-0.3%
Other income	Rs m	131	320	143.8%
Total Revenues	Rs m	-11,795	-11,570	-1.9%
Gross profit	Rs m	9,020	11,384	26.2%
Depreciation	Rs m	2,597	2,599	0.1%
Interest	Rs m	477	312	-34.5%
Profit before tax	Rs m	6,078	8,793	44.7%
Tax	Rs m	2,132	3,160	48.2%
Profit after tax	Rs m	3,946	5,633	42.7%
Gross profit margin	%	-75.6	-95.7
Effective tax rate	%	35.1	35.9
Net profit margin	%	-33.1	-47.4

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UNITED BREWERIES Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 21 billion as compared to Rs 18 billion in FY18, thereby witnessing an increase of 16.8%.
• Long-term debt down at Rs 754 million as compared to Rs 2 billion during FY18, a fall of 63.2%.
• Current assets rose 14% and stood at Rs 30 billion, while fixed assets rose 14% and stood at Rs 24 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 54 billion as against Rs 47 billion during FY18, thereby witnessing a growth of 14%.

UNITED BREWERIES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	26,903	31,838	18.3
Current Liabilities	Rs m	17,970	20,996	16.8
Long-term Debt	Rs m	2,050	754	-63.2
Total Liabilities	Rs m	47,234	53,844	14.0
Current assets	Rs m	26,405	30,014	13.7
Fixed Assets	Rs m	20,829	23,830	14.4
Total Assets	Rs m	47,234	53,844	14.0

UNITED BREWERIES Cash Flow Statement Analysis

• UNITED BREWERIES's cash flow from operating activities (CFO) during FY19 stood at Rs 6 billion, an improvement of 14.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -4 billion, an improvement of 118.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion, an improvement of 46% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 167 million from the Rs 27 million net cash flows seen during FY18.

UNITED BREWERIES Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	5,633	6,430	14.2%
Cash Flow from Investing Activities	Rs m	-1,970	-4,304	-
Cash Flow from Financing Activities	Rs m	-3,635	-1,959	-
Net Cash Flow	Rs m	27	167	513.2%

Current Valuations for UNITED BREWERIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.3, an improvement from the EPS of Rs 14.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,395.2, stands at 65.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.6 times, while the price to sales ratio stands at -31.0 times.
• The company's price to cash flow (P/CF) ratio stood at 39.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	-45.1	-45.0
TTM Earnings per share	Rs	14.9	21.3
Diluted earnings per share	Rs	14.9	21.3
Price to Cash Flow	x	38.3	39.2
TTM P/E ratio	x	63.6	65.5
Price / Book Value ratio	x	9.6	10.1
Market Cap	Rs m	258,919	322,409
Dividends per share (Unadj.)	Rs	2.0	2.5

Ratio Analysis for UNITED BREWERIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY19, from 1.5x during FY18. 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 29.2x during FY19, from 13.8x during FY18. 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 17.7% during FY19, from 14.7% during FY19. 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 27.9% during FY19, from 22.6% during FY18. 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 11.0% during FY19, from 9.4% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.5	1.4
Debtors’ Days	Days	-4,587	-4,639
Interest coverage	x	13.8	29.2
Debt to equity ratio	x	0.1	0.0
Return on assets	%	9.4	11.0
Return on equity	%	14.7	17.7
Return on capital employed	%	22.6	27.9

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 947.2 to Rs 1,395.2, registering a gain of Rs 448.0 or around 47.3%.

Overall, the S&P BSE SENSEX is up 16.3% 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