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 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