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Zwack profit up despite health tax on falling costs

Telco

Zwack Unicum, Hungaryʼs best-known spirits maker, posted after-tax profit on Tuesday of HUF 711 mln in the first half of its business year that ended on September 30, up 21.2% from a year ago, as the fall of net revenue slowed and costs were kept down.

In the first quarter of its business year, Zwackʼs after-tax profit grew 6.1% from a year earlier.

Gross sales increased 2% to HUF 9.435 bln but sales net of taxes fell 1.3% to HUF 5.525 bln in the first half, after falling 8.4% in the first quarter, the companyʼs un-audited earnings report according to IFRS showed yesterday.

A public health product tax was levied on a wide range of spirits as of January 1 of this year.

But Zwack reined in operating costs by 27% in the first quarter, and operating expenses were down 0.3% on average in the first half to HUF 2.698.

Operating profit was up 23.3% in the first half to HUF 939 mln, after rising 25% to HUF 460 in the first quarter.

Net domestic sales were down 1.7% to HUF 4.882 bln with sales in the Diageo portfolio dropping 9.5% and others up 5.8%, while export earnings increased 1.7% to HUF 643 mln.

Late June, shareholders approved to pay a HUF 1,200-per-share dividend on the 2014/15 financial year that ended on March 31.

In its previous financial year, Zwack had after-tax profit of HUF 1.77 bln, 16.7% more than in the preceding year, according to Hungarian Accounting Standards.

According to IFRS, it had after-tax profit of HUF 1.71 bln, up 14.8% from the previous year.

Zwack has tapped profit reserves to top up its dividends for several years.

Zwack Unicum is a Standard category issuer on the Budapest Stock Exchange.

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