Sapporo Holdings ups profits outlook on asset sale

Sapporo Holdings ups profits outlook on asset sale

Sapporo Holdings has significantly raised its profits guidance for 2010 due to an expected one-off gain from the sale of redundant brewing facilities in Japan.

The smallest of Japan's 'big four' brewers said today (30 November) that net profits are set to reach JPY7bn (US$83.4m) for the 12 months to the end of December. It had previously forecast full-year profits of JPY4.8bn.

If Sapporo meets its new guidance, net profits will rise by 54% on 2009. The change reflects a one-off gain from the JPY16.6bn sale of the group's Osaka brewery in Japan to The Ritsumeikan Trust. This gain will offset a one-off charge of JPY8.4bn following Sapporo's decision to sell a beer warehouse in Keiyo at only a third of its book value.

Falling demand for beer in Japan has prompted the country's major brewers to cut costs in their domestic market and seek growth opportunities overseas. Last week, Sapporo said it would enter South Korea's beer market via a tie-up with the country's leading dairy group, Maeil Dairy Industry Co.

Sapporo reaffirmed its guidance on full-year net sales, which are set to rise by 9% to JPY391bn. Operating profits are expected to increase by nearly 5%, to JPY13.5bn.