JAPAN: Earthquake deepens Sapporo Holdings' Q1 losses
- Q1 net losses double to JPY6.3bn (US$78.1m)
- Operating losses narrow by 7% to JPY3.3bn
- Net sales drop by 5% to JPY72.9bn
- Earthquake costs hit JPY1.9bn and are set to rise further
Sapporo Holdings falls deeper into red in Q1
The earthquake and tsunami that struck Japan have plunged Sapporo Holdings deeper into the red for its first quarter, and forced the brewer to withhold guidance for the year.
Initial earthquake-related costs of JPY1.9bn (US$235m) was the main reason for a doubling of Sapporo's net losses in the three months to the end of March, to JPY6.3bn. The brewer said this week that it expects to report further costs from the disaster.
It has withdrawn full-year guidance while it attempts to assess the full impact of the 'quake and tsunami, which struck Japan's eastern coast in March.
Despite damage to facilities in the disaster area, Sapporo managed to reduce its operating losses in the quarter by 7%, to JPY3.3bn. However, global net sales fell by 5% for the three months, to JPY72.9bn, largely due to a 9% drop in the group's alcoholic drinks sales in Japan.
The country's on-trade suffered particularly badly in the period. "An already harsh operating environment was made even more difficult by the earthquake and tsunami disaster, which forced many outlets to close or shorten operating hours and triggered a sharp drop in consumer spending," Sapporo said.
Since the 'quake, the company has been forced to concentrate production on only core brands, such as Yebisu, Sapporo Draft Beer Black Label.
However, there is good news for the Sapporo Premium Alcohol Free beer, which was launched in the aftermath of the quake and has surpassed original sales targets.
For the company's announcement, click here.
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