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Asia Pacific Breweries (APB) has reported a strong start to the year with healthy profit growth in its first quarter.

For the quarter ended on 31 December 2007, the Asian brewer reported that profit before interest and tax rose 9% over last year to S$83.3m (US$58.8m). On an organic basis PBIT reached S$86.9m, up 13%. The organic figure doesn't include translation difference and gestation losses on the first three years' performance of greenfield breweries in Vientiane (Laos), Ulaanbaatar (Mongolia) and Hyderabad (Andhra Pradesh, India).

Attributable net profit before exceptional items (APBE) increased organically by 13% to S$46.1m. Including translation difference and gestation losses, APBE rose S$3.5m or 9%.

 Koh Poh Tiong, chief executive officer, APB, said: "Once again, Indochina (ie Cambodia, Laos and Vietnam) has excelled as our best performing region, reporting a robust volume growth of 37% and a PBIT gain of 23%.

"Organically, PBIT growth for the region was 36%, excluding the temporary gestation loss from our brewery investment in Laos and translation effect arising from depreciation of US dollars and Vietnamese Dong. During the period under review, both Vietnam and Cambodia saw volume increase by 35% and 43% respectively, driven mainly by strong demand. Contributing to the better results were also achievements by the three breweries which we acquired in Vietnam in the last two years - ie the breweries in Quang Nam, Da Nang and Tien Giang. This stronger set of numbers is a testament to our intra-market growth strategy."

Malaysia too had a strong showing with an organic PBIT gain of 9% boosted by robust demand, which drove volume up by 15%.

Singapore outperformed last year's results with a 9% rise in PBIT. Driving Singapore's higher PBIT was a 12% volume growth led by higher export, contract brew and domestic sales. Export volume which surged 22% over the same period last year, accounted for a significant portion of Singapore's volume gain. Meanwhile, Singapore's domestic volume grew 4% versus last year.

In New Zealand, a favourable sales mix and a stronger New Zealand dollar have led to a 9% growth in PBIT.

Faring well was also Papua New Guinea, reporting a 12% volume increase and 5% rise in organic PBIT.

Koh said: "APB's on-going regionalisation has taken our business to as far as Mongolia where we have set up our first brewery there; and further invested in Indochina and India where our breweries in Vientiane and Hyderabad will soon commence operation in the first quarter of 2008. Although this means that we see some gestation losses in the interim, it is imperative that we sustain expansion to bolster our earnings base and lift future earnings to a higher level."

"It is also our objective to ensure the continued success of our brands. Apart from offering a wide portfolio of international, regional and local beer brands to secure the different segments of each market, we shall continue to globalize our flagship brand, Tiger, though export; and grow Heineken, the world's most international beer brand," added Koh.

The company said that, looking forward, the fundamentals of the business remain sound.

"Barring unforeseen developments, net earnings for the new financial year are expected to be higher than last year," a statement said.


Sectors: Beer & cider

Companies: Heineken

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