AUS: Lion's beer performance boosts H1 profits
- Beer, spirits & wine divisions H1 EBIT rises by 9.2% to AUS$337.3m (US$356.9m)
- Sales up by 1.7% to AUS$1,197.8m
- Australia volumes rise 3.4% in BSW division
- Dairy & drinks division sees H1 EBIT dive 27.1% to AUS$49.8m
Lion's alcohol division helped boost first -half profits
Lion has reported a near double-digit rise in first-half earnings from its beer, spirits & wine (BSW) divisons, but its dairy & soft drinks arm saw profits slide.
Operating earnings in its BSW divisons rose by 9.2% to AUS$337.3m (US$356.9m) in the six months to the end of March, the Kirin Holdings-owned group reported late last week. Sales were up in the divisions by 1.7% to AUS$1,197.8m.
Volumes rose 3.4% in its domestic market of Australia, but volumes fell 3.7% in New Zealand.
In its beer markets alone, Lion CEO Rob Murray said the firm grew volume and share in a declining sector through its "focussed long-term investment in marketing and innovation".
He added: "The rise of our market-leading mid-strength beer XXXX GOLD to the number one beer brand in the country is evidence of this – and not only a positive commercial development but also a positive shift in our drinking culture more broadly.”
Looking ahead, he said the outlook for its beer business was "positive", with a "number of international brand owners choosing to partner with Lion in this market"
In June, Lion agreed to aquire Little World Beverages, adding to the 36% stake it already holds in the company. Murray said this presents a "further growth opportunity in the flourishing craft market".
However, Lion's dairy & drinks division took a hit in H1 with operating earnings falling 27.1% to AUS$49.8m.
Volumes were affected by "the loss of private label contracts, fresh dairy range deletions and the overall category decline in juice," the group said. But it added: "The major impact on profitability was the ongoing decline of branded white milk sales and the transfer of volume from non-grocery channels to grocery as a result of $1-a-litre private label pricing."
To view the company's full statement, click here
In the fourth part of Euromonitor's preview of 2013, alcoholic drinks analysts Spiros Malandrakis and Zsuzsa Szilagyi consider what the future holds for the world's brewers....
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