SINGAPORE: Brewery building to weigh on APB earnings
Asia Pacific Breweries has warned that plans to build four greenfield breweries will "temporarily" hit earnings this year.
The Singapore-based brewer is set to build plants in China, Mongolia, Laos and India, projects that will take its brewery count to 35 in 12 countries.
APB admitted the construction plans would lead to a "temporary dilution in net earnings" for its current financial year, which ends on 30 September.
However, the company added: "It is imperative that APB continues to invest in new, emerging markets to prime the company for further growth in the coming years."
On Friday (9 February), the Tiger Beer brewer said operating profit during its first quarter to 31 December had leapt 14% on an organic basis to S$76.2m (US$49.6m).
However, taking into account costs related to the formation of ventures in Sri Lanka, Mongolia and India, operating profit was up only 1% on the year. Quarterly revenues rose 7.3% to S$476.2m.
APB saw volumes rise in all its markets except Thailand where sales were hit by a ban on alcohol advertising.
Earnings fell in Indochina and New Zealand, APB said, despite rising volumes in both markets as local currency fluctuations weighed on profits.
Dutch brewing giant Heineken owns a 42% stake in APB, its partner in making headway into emerging beer markets in Asia.
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