E-Malt.com News article: Australia: Lion Nathan expects a net profit of AUD 245-260 mln for this year

Brewing giant, Lion Nathan Ltd, announced on February 7 it expects to report net profit before one off items of AUD 245-260 mln for the year to September, according to XFN-ASIA.

The beer and wine group warned on February 7 that conditions in New Zealand were increasingly difficult, but it was confident of meeting previous profit guidance due to solid Australian sales. For the three months ended December, total beer volume fell 0.7 per cent to 52.1 million litres. The company said that in Australia total volume rose 3.3 per cent to 204.8 million litres in the first quarter.

"In New Zealand, performance was mixed with a beer market characterised by sustained and at times, intense price discounting, particularly in key sales weeks," Lion Nathan chief executive Rob Murray said.

The projection confirms guidance it made for the current fiscal year last November. In the previous year to September 2006, the firm posted net profit of 226.8 mln aud, up 12.3 pct.

Lion Nathan, 46 per cent owned by Japan's Kirin Brewery, is the dominant liquor group in New Zealand with beer brands such as Lion Red and Steinlager, and wine label Wither Hills.

"While our New Zealand business continues to face highly competitive conditions, we are confident about meeting our full year profit outlook on the basis of a solid overall first quarter, particularly from our Australian business," Mr Murray said.

Australia's second-largest brewer is reviewing the site of its Auckland brewery, near the upmarket shopping district of Newmarket. Lion Nathan is seeking expressions of interest later this month from parties wanting to buy or redevelop the current site, as part of an investment programme to build its business and cut costs.

The 5-ha site has been estimated as worth up to $100 million. New Zealand accounts for about 15 per cent of the company's assets and operating profits. The company employs 1400 people in New Zealand and 1800 in Australia. Lion dropped its bid last year for New Zealand drinks group, Independent Liquor.

"The company continues to evaluate corporate development opportunities consistent with its stated strategic focus on beer, fine wine, spirits and ready-to-drink pre-mixed spirits in Australia and New Zealand," Mr Murray said. In New Zealand, Lion Nathan shares closed up 10c at $9.70.

(1 usd = 1.28 aud)


10 February, 2007