Zwack profit up due to strict control, despite health tax

Telco

Zwack Unicum, Hungaryʼs best-known spirits maker, posted on Tuesday an after-tax profit of HUF 355 mln in the first quarter of its fiscal year, which ended June 30 – up 6.1% from a year ago as revenue fell – but costs were controlled, Hungarian news agency MTI reported late yesterday.

Zwack had revenue of HUF 4.346 bln, down 5.7%, the companyʼs unaudited earnings report shows, according to IFRS.

After payment of excise tax, revenue came to HUF 2.55 bln, down 8.4%.

Zwack noted that first-quarter net domestic sales fell 8.7% to HUF 2.263 bln.

The decrease in domestic sales resulted from the public health product tax levied on a wide range of spirits as of January 1st this year, Zwack explained. To preempt the tax, trade partners bought a stock of 3-5 months in December. The spill-over effect could be felt even in the first quarter of the current fiscal year, Zwack said.

Export earnings narrowed by 5.3% to HUF 287 mln.

But Zwack reined in operating costs by 27% to HUF 1.249 bln, lifting operating profit by 25% to HUF 460 mln.

The gross margin of sales improved 3.3% points to 60.6% on higher sales prices and changes in the product mix, Zwack said on Tuesday.

In late June, shareholders approved the payment of a HUF 1,200-per-share dividend on the 2014/15 financial year that ended March 31.

In the last 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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