United Spirits profits tumble31 May 2012
Indian distiller United has reported an 83% dive in net-profits to £1.8 million after the firm was hit by higher domestic taxes and foreign exchange losses.
The losses at United, which is the world’s largest by volume exceeded the expectations of analysts as shares dipped 6% on the news.
The firm, which traditional performs well in India, did increase net sales by 17% to Rs18.6 billion but expenses were up 11% to Rs17 billion. Foreign exchange losses jumped from Rs 2.7 million during the same quarter last year to Rs205 million and interest costs were up 43% to Rs1.7 million.
United said that its results had been “affected significantly by notional losses on account of exchange differences in inter-company balances … [and] from increase in interest costs.”
The company has also blamed higher taxes and duties and taxes in Maharashtra and West Bengal.
Earlier this year, it emerged that United was discussing a deal with Heineken for the Dutch brewer to take a 13% stake in the company.
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