SINGAPORE: “Challenging” quarter, but sales, profits still up at Asia Pacific Breweries
Asia Pacific Breweries has posted a healthy start to its financial year, despite ongoing struggles in China.
The Singapore-based company, a joint venture between Heineken and Fraser & Neave, said today (13 February) that profit before interest, tax and exceptional items (PBIT) in the three months to the end of December rose by 5% year-on-year, totalling S$87.3m (US$57.9m).
The profit increase came on the back of a 2.2% lift in sales for the quarter to S$580.2m.
Attributable net profit (after exceptional items) for the group was also up in the three-month period, by 13.4% to S$48.3m.
While PBIT in Indochina - which comprises Cambodia, Laos and Vietnam -rose by 6%, thanks to price increases and savings in overheads, APB's China unit recorded a loss of S$6.1m, due to lower volume, foreign exchange loss, increases in raw material prices and higher marketing expenses.
APB also highlighted "intense competition" and exclusion of results from Jiangsu Dafuhao - having sold its stake in the Chinese brewer to Nantong last June - as hindering its performance in the country.
In India and Sri Lanka, a 37% leap in volumes failed to help the company's bottom line, with the region delivering a loss of S$3.4m for the quarter, due to higher marketing expenses incurred in Aurangabad in India and a "gestation loss" from the company's greenfield brewery in Andhra Pradesh, which began operations a year ago.
In Thailand, volumes and PBIT slipped 13% and 4% respectively, due to the political unrest and regulatory restrictions on consumption and advertising of alcoholic products. Meanwhile, APB saw volumes increase by 2% in New Zealand, although PBIT fell by 46% as a result of a weaker New Zealand dollar, intense competition, higher duties and higher packaging costs.
"The current global financial crisis is unprecedented and we can expect the operating environment to remain challenging," said APB's CEO, Roland Pirmez. "Notwithstanding, APB has a strong balance sheet and the group's business fundamentals remain sound.
"To emerge from the challenges, APB will continue to leverage our strengths for greater competitive advantage and exercise disciplined cost management, watching our operating costs and capital allocations very carefully."
Pirmez concluded: "As we address the short-term challenges, APB remains focused on its long term vision. The group will keep reviewing investment plans in light of the current environment and invest selectively to support future growth and boost our competitiveness."
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