Zwack earnings practically flat as lower costs balance decline in sales
After-tax profit of Zwack Unicum, Hungaryʼs biggest spirits company, edged down 1% year-on-year to HUF 653 million in the first half of its business year started April 1, Hungarian news agency MTI reports, citing an earnings report released today.
Net sales revenue fell 12% to HUF 5.72 billion as a pandemic lockdown in the spring weighed on sales in restaurants and pubs, businesses that account for about half of Zwackʼs turnover. Material costs dropped just 6% to HUF 2.17 bln, but operating costs fell faster than revenue, declining 19% to HUF 2.9 bln as Zwack saved on marketing costs at summer festivals that were canceled because of the pandemic.
Zwack said Q1 sales dropped 24%, but Q2 sales inched up 1pc as restrictions were lifted. It added that the second wave of the pandemic caused "another major setback" in September.
The company noted that it had paid HUF 10 mln in interest on a HUF 2.5 bln short-term loan it took out for "enhanced financial security" during the pandemic.
Zwackʼs balance sheet shows the company had retained earnings of HUF 4.06 bln at the end of September.
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