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Chile CCU's 2Q Net Profit Up 128.7% To CLP29.9 Billion On Year

SANTIAGO -(Dow Jones)- Chilean beverage company Compania Cervecerias Unidas SA (CCU) posted a net profit of 29.9 billion Chilean pesos ($56.2 million) in the second quarter, up 128.7% from the same period of 2008, mainly due to a better non-operating result, partially offset by lower operating income and higher taxes.

Total revenues increased 3.5% to CLP158.58 billion as a result of 4.3% higher consolidated volumes, partially offset by 0.9% lower average prices, the company said in a press release late Wednesday.

Operating income fell 5% to CLP14.30 billion due to the higher costs of raw materials in all business units, except beer Argentina, due to the Chilean peso's depreciation against the dollar.

Ebitda rose 1.4% to CLP28.72 billion though the Ebitda margin fell 0.4 percentage points to 18.1%.

The increase in sales volumes is explained by increases in the nonalcoholic segment, beer in Chile, and wines, partially offset by lower sales of spirits and beer in Argentina, the press release said.

Despite higher prices for beer, wine, spirits and non-alcoholic beverages, the consolidated average price was lower due to the impact of the exchange rate on beer prices in Argentina, which fell in Chilean pesos terms by 22.1%.

CCU's non-operating result improved to CLP19.27 billion compared to a loss of CLP2.78 billion in the same period of 2008, mainly due to a one time profit of CLP24.45 billion generated in the sale of Aguas CCU Nestle SA's 29.9% equity to Nestle Waters Chile S.A.

"We are very pleased with CCU's performance considering the adverse domestic as well as international economic scenario in which we have developed our activities during the second quarter," CCU Chief Executive Patricio Jottar said.

Even with unfavorable economic indicators, CCU increased sales by volume in all segments except for spirits and beer in Argentina, he said.

However, Jottar admitted the depreciation of the Chilean peso has increased the cost of raw materials and driven down operating profit in the second quarter.

"A depreciation of the peso vis-a-vis the dollar is detrimental for CCU because raw materials indexed to the dollar become more expensive in Chilean pesos regardless of the commodities prices," said Jottar.

CCU makes and bottles beer, soft drinks, mineral water and fruit juices. It also distills pisco-grape brandy and rum.

It has beverage licenses for products from Heineken Brouwerijen BV (HEIA.AE), Anheuser-Busch InBev NV (AHBIY), PepsiCo Inc. (PEP), Paulaner Brauerei AG, Schweppes Holdings Ltd., Guinness Brewing Worldwide Ltd. and Societe des Produits Nestle SA.

-By Julian Dowling, Dow Jones Newswires; 56-2-820-4241; julian.dowling@ dowjones.com

  (END) Dow Jones Newswires
  08-06-091203ET
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