Murree Brewery’s Profits Drop by 45% for FY2020

Pakistan’s most prominent manufacturer of alcoholic products and one of the oldest public listed companies, Murree Brewery, has announced its financial results for the year ended June 30, 2020.

The company’s profits were almost halved to Rs. 681.72 million during the fiscal year as the profits went down by around 45 percent. It had reported a profit of Rs. 1.22 billion in FY19. During the Q4, the company has incurred a loss of Rs. 180 million which was due to the COVID-19 impact and an increase in raw material costs which was mainly due to the devaluation of the Rupee against the US dollar.

However, the breakdown of the result was not revealed by the company.

Amidst the COVID-19 pandemic, Murree’s sales took a dent of 11.20 percent during the year. The overall net sales were down to Rs. 8.99 billion as compared to Rs. 10.12 billion. Similarly, the cost of sales also went down by 7.50 percent to Rs. 6.69 billion from Rs. 7.23 billion.

For more than a month, Murree Brewery, like many other manufacturers, was forced to halt the production due to the COVID-19 pandemic.

The company has three divisions; liquor, glass, and Tops division that makes juices, etc. Amongst these, liquor is the most profitable. The liquor division is known to be the major contributing segment in terms of profits of the company with Tops division majority of the losses.

However, the lockdown worsened liquor sales during the last months of FY20. The breakdown is not yet available but as the result suggests, Murree has booked a loss in the last quarter of FY20.

The cost of sales was reported at Rs. 6.69 billion, down to 7.50 percent as compared Rs. 7.23 billion. This took the gross profits to Rs. 2.30 billion, dipping by 20.14 percent as compared to Rs. 2.88 billion during the same period last year.

During the last months of the year, the company was facing a huge supply problem owing to the COVID-19 pandemic. The selling and distribution expenses went down by 18.70 percent to Rs. 870 million from Rs. 1.07 billion during the above mentioned period, while the other income decreased to Rs. 69.45 million from Rs. 107.22 million.

Net finance income was increased to Rs. 320.44 million as compared to Rs. 261.49 million during the year. Earnings per share were decreased to Rs. 24.64 from Rs. 44.21 during the same time period.

Murree has also announced a final cash dividend of Rs. 5 per share i.e. 50 percent. This is an addition to the Interim Dividends already paid at Rs. 20 per share.

It is worth mentioning that during the last quarter, Murree Brewery had also asked for permission from the Government of Punjab to manufacture alcohol-based hand sanitizers.

At the time of filing this report, Murree’s share at the bourse was trading at Rs. 580, down by Rs. 21.24 or 3.53%, with a turnover of 6,200 shares on Monday.

Photo Credits: Tanveer Shahzad