Lion Nathan has posted a leap in profits for the first half of this year. The Australian brewer today (18 May) reported a 52% rise in first-half profits to A$127.6m (US$96.4m), which it described as a solid result in a competitive market. Australia's second largest brewer announced first-half earnings per share of A$0.239, up from A$0.157 in the first half of last year.

Although the earnings growth was achieved in the face of falling domestic beer demand and increased competition from market leader Foster's Group, the result was slightly below market forecasts which were anticipating net profit of around A$131m. A first-half dividend of A$0.15 was declared, up from A$0.14 in H1 last year.

The company, which includes the Tooheys, James Squire and Steinlager brands in its portfolio, anticipates that those prevailing difficult conditions will prevail in the second half.

"The Australian beer business performed well in a competitive market with volume and value growth in core brands," said chief executive Rob Murray. Full-year profit forecast before one-off items would remain in the range of A$230m to A$235m, compared with A$202.7m a year earlier, he added.

First-half turnover at Lion Nathan, which is 46%-owned by Japan's Kirin Brewery Co., was 2.4% down at A$958.1m. The Australian beer business recorded a 5.8% rise in EBITA to A$210.7m, in spite of tough market conditions.

In New Zealand, a fall in beer demand and strong price competition, particularly leading up to Christmas, contributed to an earnings decline of 8.8% to NZ$46.4m, the company said.

Earnings at the company's wines and spirits division were 22% down at A$7.6m. However, when a A$1.5m charge in respect of self-generating and regenerating assets is stripped out, the company said this segment's earnings grew by 3.4% to A$9.1m.

Turnover was down by 8% in the group's Australian wine division, with demand moving towards premium wine, the company said. During the first half, Lion Nathan received a cash boost of A$91.8m, the net proceeds from the sale of its unprofitable Chinese beer subsidiary.