• H1 net losses narrow 7.5% to HKD94m (US$12m)
  • Net sales up 4.5% to HKD803.6m
  • Operating losses narrow 93% to HKD936,000
  • Beer volumes down 1% to 394,000 tonnes
Kingway is in SABMillers sights

Kingway is in SABMiller's sights

Kingway Brewery Holdings has reduced its first-half losses ahead of a takeover by SABMiller's China JV.

Net losses narrowed by 7.5% to HKD94m (US$12m) in the six months to the end of June, the state-owned Guangdong Holdings Group subsidiary said yesterday (27 August). Net sales increased by 4.5% to HKD803.6m over the same period while operating losses neared break-even point, falling from HKD13.8m to HKD936,000.

China Resources Snow Breweries, a JV between SABMiller and China Resources Enterprise, agreed in February to take over Kingway's beer business for US$864m.

The deal was reportedly due to close this month but has yet to complete. Kingway yesterday confirmed that China's anti-monopoly authorities cleared the deal on 8 August.

The move follows a difficult 2012 for the brewer, when net losses totalled HKD168.5m compared to a HKD34.8m profit in 2011. The group has blamed the drop on China's competitive beer market. 

In today's results, beer volumes continued to fall, down 1% in the six-month period, though the decline was less than 2012's 14% volumes drop.

The company said it is confident it can finance operations going forward after it last month secured CNY120m (US$19.6m) in banking facilities to add to the CNY90m it secured in June. 

Looking ahead to the rest of the year, the company said it will focus on reinforcing its existing beer markets and sales channels.

To read the company's official statement, click here.