India’s United Spirits suffered a 69% fall in profit in the second quarter as COVID restrictions continued to hit the business.
Net profit for the quarter ended 30 June stood at INR691m (£6.7m, $9.2m), compared with a profit of INR1,673m for the first quarter of 2021, the company said in an exchange filing.
Nonetheless, it was a marked improvement on the loss of INR2.1bn in the same period of 2020, when the impact of COVID was at its height.
Total revenue for the company – a subsidiary of Diageo – was INR60.7bn in Q2, down 19% on Q1, but 58% higher than the same period last year.
In its Q2 report, the company said that once the lockdown due to the COVID-19 pandemic was lifted in May 2020, management “had taken appropriate actions” to scale up the group’s manufacturing to the levels prior to COVID-19. Both off-trade and on-trade sales also gradually resumed across the country.
However, temporary disruptions continued to occur from time to time with curfews or lockdown restrictions, including as a result of the recent surge of COVID during Q2.
India again saw a massive increase in virus infections for the second time in April this year as cases went to 40,000 per day, leading to a second lockdown that was lifted only from the beginning of June.
“We have delivered a resilient performance on the back of our operational agility and the intrinsic strength of our portfolio as we managed through the challenges of localised and asynchronised state lockdowns,” managing director Hina Nagarajan said in a statement. “The company was back to full operations as we exited the quarter.”
United Spirits said the prestige segment sales rose 58% year-on-year and accounted for 66.7% of net sales during the quarter.
Popular segment sales increased 60% year-on-year and accounted for 31.2% of the total sales.
“Looking forward, with the drop in COVID positivity rates and steady increase in the vaccination coverage, we expect the recovery momentum to accelerate. We remain focused on stimulating demand through our renovation, innovation, and other category growth initiatives,” Nagarajan said.
Shares of United Spirits ended 0.8% higher at INR680.25 on the National Stock Exchange.