JAPAN: Sapporo Holdings sees earthquake hammer nine-month profits
- Nine-month net profits slide by 83% to JPY573m (US$7.3m)
- Net sales rise by 14% to JPY324bn
- Operating profits up by 29% to JPY12.3bn
- One-off earthquake costs cripple brewer's profits
Sapporo Holdings nine-month sales rise on international demand
Sapporo Holdings has reported a slump in nine-month profits due to the earthquake and tsunami that struck its native Japan, but demand for the group's beer across Asia lifted net sales.
The company reported JPY4.7bn (US$60m) in disaster costs related to the earthquake, causing net profits to tumble by 83% for the nine months to the end of September, to JPY573m. The figures show that the earthquake has had a proportionately greater impact on Sapporo than on rival Asahi, which also reported nine-month figures today (31 October).
Despite the damage to profits, Sapporo's net sales rose by 14% on the same nine months of 2010, to JPY324bn. Strong demand for the group's beer in Asia, as well as for its namesake lager brand in the US, enabled the company to offset ongoing decline in its domestic market.
The increase in sales drove a 29% rise in operating profits, to JPY12.3bn. During the period Sapporo continued efforts to expand overseas, albeit on a lower scale than its main domestic rivals, Asahi, Suntory and Kirin.
Sapporo said that it will be brewing its namesake beer in Vietnam by the end of November, thanks to the scheduled opening of its first brewery in the country. This month, meanwhile, Cooper's Brewery began selling Sapporo beer in Australia.
Looking ahead, Sapporo said that it is cautious on the outlook for Japan's drinks market. While it cited a gradual recovery from a post-earthquake "business slump", as well as strong early sales for Sapporo alcohol-free beer, the company said that Japan's economy "remains clouded by a number of major concerns". These, it said, include financial instability in Europe, an economic slowdown in the US and the appreciation of Japan's yen currency.
For the company's announcement, click here.
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