JAPAN: Kirin Holdings H1 sales dip, profits rise

Ongoing weak consumer demand for beer in Japan, damaged further by the earthquake and tsunami, proved a drag on Kirin Holdings' sales for the first half of 2011.

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Net sales for the six months to the end of June slipped by 0.9%, to JPY1tn (US$12.7bn), Kirin said today (5 August). A 6.4% drop in alcoholic drinks sales in Japan, in part a consequence of the devastating earthquake that struck the country earlier this year, outweighed a 27.6% increase in sales at the group's overseas beverages business.

Kirin's soft drinks sales in Japan fell by 12.5% on the same period of 2010, while the division also reported operating losses of JPY1bn.

However, lower selling costs in beer and pharmaceuticals helped Kirin to increase half-year operating profits by 21.7% for the six months, to JPY72.8bn. Meanwhile, a series of restructuring charges in the first half of 2010 allowed net profits to soar by 150% in the corresponding period of 2011, to JPY17.9bn.

Regarding the earthquake specifically, Kirin said that "operations are gradually being returned to normal", following months of repairing damaged facilities and dealing with frequent power cuts.

It added: "Despite the harsh conditions continuing through, constraints on the supply side have been gradually easing and consumer spending is bottoming out". Brewing at its most heavily-damaged plant, in Sendai, is set to restart in September, with the first shipments to begin in early November, the group said.

Kirin reported JPY16.9bn in earthquake-related charges for the half-year.

Also today, Kirin's subsidiary in Australia and New Zealand, Lion, reported an 11% fall in first-half profits at its alcoholic drinks division.

For the company announcement, click here.

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