JAPAN: Cost cutting boosts profits for Asahi in year so far

By just-drinks.com editorial team | 30 October 2008

Asahi Breweries has posted a healthy lift in net profit for the year so far, as reduced costs offset slowing sales.

The Japanese company said yesterday (29 October) that group net profit for the nine months to the end of September leapt by 22.5% year-on-year, coming in at JPY41.80bn (US$427.3m). Operating profit followed suit, up by 14.8% to JPY70.46bn, despite a 0.2% slip in sales for the period, down to JPY1.08 trillion.

While price rises made their presence felt on beer and 'happoshu' beverage sales, Asahi saw its profits benefit from lower fixed expenses in areas such as advertising costs.

The group's soft drinks unit posted a slight lift in year-so-far sales, up 5.3%, but operating profit took a massive hit - down by 60.7% year-on-year - thanks to rising costs of raw materials and a slower performance in South Korea.

Looking forward, the company reaffirmed its full-year forecasts. Net profit for 2008 is expected to rise by 1.2% on 2007, while operating profits are targeted to rise by 10.1%. Sales remain on course to come in 0.4% on last year, at around JPY1.03 trillion.

According to industry figures released in July, Asahi remains the market leader in the Japanese domestic beer market, accounting for around 37.5% market share.

Sectors: Beer & cider, Soft drinks, Water

Companies: Asahi