AUS: Lion loses roar as drinks profits slide - Kirin Holdings
Kirin Holdings' Lion improves beer market share, but profits drop
Kirin’s Australian and New Zealand subsidiary, Lion, has reported an 11% fall in first-half profits at its alcoholic drinks division.
Lion's beer, spirits and wine businesses reported earnings before interest and tax (EBIT) of AUD308.9m (US$324.2m) for the six months to the end of March, down 10.8%. Net sales fell by 6.3% to AUD1.17bn, it said today (5 August).
Group CEO Rob Murray blamed the declines on poor consumer confidence and natural disasters in Australia and New Zealand.
"These softer trading conditions have been compounded by natural disasters in Lion's key marklets, including the February earthquake in Christchurch and the coldest and wettest (Australian) east coast spring and summer for decades," he said.
However, Nielsen data shows Lion's Australian beer business has recovered market share since the end of the reporting period, rising from 43% at the end of March to 44% per cent in June on a moving annual total basis.
Meanwhile, Foster's beer market share fell from 49.1% to 48.7% over the same period. This is, nevertheless, in-line with June 2010 and so consistent with Foster’s CEO John Pollaers’ claim last week to have stabilised the company's market position over the past financial year.
Elsewhere in Lion's business, the firm's dairy and juice division reported a 43.2% slide in EBIT for the half-year, to AUD68.3m. Net sales fell by 9.4% to AUD1.4bn, "driven by the loss of key private label contracts and a decrease in export sales due to the impact of the strong Australian dollar", the group said.
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