Credit Suisse has trimmed back its earnings forecast for Foster's Group.

The bank said yesterday (5 June) that a stronger Australian dollar, couple with rising malt costs, should lead to earnings for the year to June 2008 coming in 5.4% down on its earlier earnings estimate. Credit Suisse believes next year's earnings will reach A$767.3m (US$639.4m) with 2009 coming in 6.5% down at A$840.8m.

The forecast was based on an assumption that the Australian dollar level would be around US$0.84, up from the previous estimate of US$0.81.

A drought in Australia will lead to higher malt costs in the domestic beer business, the bank noted. "With currency moves potentially erasing US growth, we now view an Asia-Pacific division recovery as the main share price driver," said analyst Larry Gandler at Credit Suisse.

In February, Foster's posted a 3.5% year-on-year rise in sales for the six months to 31 December, coming in at A$2.4bn. Net profit was up 90% to A$533.4m thanks, in part, to last year's brewery sales in Vietnam and India. Excluding significant items, however, earnings rose only 11% to A$363m.