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Zwack posts falling profit, revenue in Q1

Zwack Unicum recorded declining profit and revenue in the first quarter of its business year, between April 1 and June 30, 2010, compared to the same period of last year, the company reported on Tuesday.

Zwack said in its IRFS flash report that gross sales revenue fell 23.1% to HUF 5.13 billion, and pre-tax profit dropped 32.8% to HUF 697 million.

After-tax profit is 22.1% (HUF 165 million) lower than in the same period of last year as the HUF 90 million film and performing arts grant given by the company in Q1 reduces the amount of tax payable by 63%.

Net sales revenue amounted to HUF 3.035 billion, down 27.9% yr/yr.

Export sales came to HUF 268 million, down 12.1% from last year's exports. This is due to the fact that from this year, funding given to distributors appears in the books as bonus, which reduces sales revenue, while these items appeared as marketing costs in earlier years. Without the accountancy change, export sales would show a 4.4% increase, the report said.

Domestic sales revenue declined 23.7% yr/yr to HUF 4.857 billion from HUF 6.364 billion. Revenue from sales of the company's own products fell 23.1%. Revenue from sales of products the company distributes dropped 27.3%.

The report attributed the decline in domestic sales to two factors. Consumption of spirits fell at an unprecedented rate in April-May this year. The other reason is that major early purchases were made in June last year in both retail and wholesale trade because of the July increase of the excise tax.

Material costs fell 25.2% yr/yr, slightly less than the decline in net sales revenue. As a result, gross margin slipped from 60.5% to 59%.

Zwack Unicum spent HUF 177 million on investments in Q1.

Zwack shares are listed in category "A" of the Budapest Stock Exchange. The shares closed at HUF 19,190 on Tuesday, moving between HUF 19,200 and HUF 13,900 in the past 52 weeks. (MTI-ECONEWS)