AUS: Lion Nathan celebrates strong H1, RTD to come
Lion Nathan has posted a healthy rise in net profit for the six months to 31 March, and signalled its entry into the RTD market.
The Australian drinks company said today (18 May) that net profit after tax for the period rose by 10% year-on-year, coming in at A$148.9m (US$114.2m), a record interim profit. At the same time, the group advised that it will enter the RTD category in the second half of this year.
Lion Nathan also unveiled a two-year programme designed to build brand strength, lift business and operational efficiency and reduce costs and ensure alignment of operations with strategy.
Stripping out one-time items in both periods, net profit after tax was up by 7.4% at A$151.3m. The group's performance was driven by its Australian beer business, which posted operating EBIT of A$221m, an increase year-on-year of 5.7%.
In New Zealand, however, the company said it continued to face competitive trading conditions. Although reported EBIT was down by 2.1% to NZ$50.8m (US$31.7m), after adjusting for one-time items, operating EBIT was up by 1.3% at NZ$52.6m.
On the wine side, Lion Nathan saw reported EBIT drop by 5.8% to A$4.9m, with the exclusion of one-time items resulting in a rise of 1.9%, however, to A$5.3m. The company noted that the 2006 vintage intake on owned brands is expected to be in line with sales forecasts for the year.
The group also announced Project Invest. The programme aims to lift beer marketing investment to 8% to 10% of net revenue; increase operational capital expenditure, adding an incremental A$100m between 2006 and 2009, and continue restructuring business costs associated with organisation structure changes.
Lion Nathan concluded by highlighting that full-year net profit after tax is on track for A$258m, but warned that commodity costs could play a negative role going forward.
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