United Spirits posts net loss of Rs 5,380 crore for March quarter

When United Spirits came out with its result on Thursday, it was clear why it had postponed it three times. It declared a net loss of Rs 5,380 crore for March quarter compared to a profit of Rs 56 crore in the same quarter last year. 

For the year ended March 2014, it posted a loss of Rs 4,489 crore on consolidated basis, which is a 44 times rise from Rs 101 crore loss in the previous year.

Impairment loss of Rs 3,235.73 crore, provision of Rs 1,123.16 crore and higher interest cost impacted the profit, relating to the sale of the White and Mackay whisky business of the company.

The market was expecting the loss numbers as the company warned in June that it would take a hit of Rs.3,690.3 crore as selling the whisky business was not enough for its debt repayment.

The company release also explained, "Corresponding to the provision for doubtful advances and diminution in the value of investments recognised in the standalone financial statement and impairment loss of Rs 3,235.73 crore on goodwill of WMG, Palmer Investment Group and Montrose International SA has been recognised in the consolidated financials. This impairment loss is reported as an exceptional item."

Diageo Plc, which owns around 54.8% of the shares in United Spirits now, has been cleaning up the finances of the company. 

The stock is down 1% trading at Rs 2372.