UNITED BREWERIES 2020-21 Annual Report Analysis

Wed, 31 Mar

UNITED BREWERIES has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

UNITED BREWERIES Income Statement Analysis

• Operating income during the year rose 4.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 57.3% YoY during the fiscal. Operating profit margins witnessed a growth and down at 22.0% in FY21 as against 53.6% in FY20.
• Depreciation charges decreased by 18.6% and finance costs decreased by 27.2% YoY, respectively.
• Other income grew by 440.3% YoY.
• Net profit for the year declined by 73.4% YoY.
• Net profit margins during the year grew from 26.2% in FY20 to 6.7% in FY21.

UNITED BREWERIES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	-16,327	-16,996	4.1%
Other income	Rs m	93	503	440.3%
Total Revenues	Rs m	-16,234	-16,493	1.6%
Gross profit	Rs m	8,758	3,738	-57.3%
Depreciation	Rs m	2,851	2,320	-18.6%
Interest	Rs m	311	227	-27.2%
Profit before tax	Rs m	5,689	1,694	-70.2%
Tax	Rs m	1,406	556	-60.5%
Profit after tax	Rs m	4,283	1,138	-73.4%
Gross profit margin	%	-53.6	-22.0
Effective tax rate	%	24.7	32.8
Net profit margin	%	-26.2	-6.7

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UNITED BREWERIES Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 21 billion as compared to Rs 20 billion in FY20, thereby witnessing an increase of 7.4%.
• Long-term debt stood at Rs 1 billion as compared to Rs 89 million during FY20, a growth of 1194.8%.
• Current assets rose 12% and stood at Rs 33 billion, while fixed assets fell 6% and stood at Rs 26 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 59 billion as against Rs 57 billion during FY20, thereby witnessing a growth of 3%.

UNITED BREWERIES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	35,203	35,823	1.8
Current Liabilities	Rs m	19,904	21,382	7.4
Long-term Debt	Rs m	89	1,152	1,194.8
Total Liabilities	Rs m	56,990	58,850	3.3
Current assets	Rs m	29,615	33,236	12.2
Fixed Assets	Rs m	27,376	25,614	-6.4
Total Assets	Rs m	56,990	58,850	3.3

UNITED BREWERIES Cash Flow Statement Analysis

• UNITED BREWERIES's cash flow from operating activities (CFO) during FY21 stood at Rs 6 billion, an improvement of 22.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -884 million, an improvement of 7% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 4 billion from the Rs 102 million net cash flows seen during FY20.

UNITED BREWERIES Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	5,078	6,203	22.2%
Cash Flow from Investing Activities	Rs m	-4,024	-1,516	-
Cash Flow from Financing Activities	Rs m	-952	-884	-
Net Cash Flow	Rs m	102	3,803	3,643.5%

Current Valuations for UNITED BREWERIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.3, an decline from the EPS of Rs 16.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,241.6, stands at 288.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.2 times, while the price to sales ratio stands at -19.3 times.
• The company's price to cash flow (P/CF) ratio stood at 83.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	-61.7	-64.3
TTM Earnings per share	Rs	16.2	4.3
Diluted earnings per share	Rs	16.2	4.3
Price to Cash Flow	x	34.0	83.7
TTM P/E ratio	x	56.7	288.4
Price / Book Value ratio	x	8.4	8.1
Market Cap	Rs m	296,438	289,325
Dividends per share (Unadj.)	Rs	2.5	0.5

Ratio Analysis for UNITED BREWERIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY21, from 1.5x during FY20. 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 deteriorated and stood at 8.5x during FY21, from 19.3x during FY20. 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 declined and down at 3.2% during FY21, from 12.2% during FY21. 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 declined and down at 5.2% during FY21, from 17.0% during FY20. 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 declined and down at 2.3% during FY21, from 8.1% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.5	1.6
Debtors’ Days	Days	-3,019	-2,996
Interest coverage	x	19.3	8.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.1	2.3
Return on equity	%	12.2	3.2
Return on capital employed	%	17.0	5.2

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 917.7 to Rs 1,241.6, registering a gain of Rs 323.9 or around 35.3%.

Overall, the S&P BSE SENSEX is up 74.1% 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