E-Malt.com News article: 3635

Singapore: Asia Pacific Breweries Limited (APB) announced on November 12 that financial year 2003/04 proved to be another good year for the company. The brewery reported a third consecutive year in record attributable profit and double-digit growth for the fifth consecutive year.

Revenue for the period grew 7% from S$1.28 billion to S$1.37 billion while profit before interest and taxation (PBIT) increased almost 13% from S$177.1 million to S$199.6 million. Attributable profit before exceptional items rose 12% to break the S$100 million mark for the first time at S$104.8 million, from S$93.6 million the year before.

The Directors have proposed, subject to shareholders' approval at the forthcoming Annual General Meeting, a final dividend of 14 Singapore cents per share after tax. Taken with the interim dividend of 14 Singapore cents per share after tax, this will give a total distribution for the year of 28 Singapore cents per share after tax or 35 Singapore cents gross.

"All our markets, except Singapore, witnessed a growth in sales. Of particular note is Indochina which showed a 14% growth in sales, thereby maintaining its pole position," said Mr Koh Poh Tiong, Chief Executive Officer, APB. "Our breweries in South Vietnam and Cambodia are operating at full capacity and our beers are market leaders in those two countries."

"To cater to increasing demand, Cambodia increased its capacity in December 2003. Likewise, our brewery in South Vietnam, having obtained the necessary authorities' approvals, will increase capacity by 50% from 1.5 million to 2.3 million hectolitres by 2006. The expansion will result in an increase in sales for the breweries and greater market penetration for our brands," elaborated Mr Koh.

The other operations that are main contributors to Group PBIT are New Zealand, Singapore and Papua New Guinea.

China, a long-term growth market for the Group, showed signs of improvement with stronger sales. "Sales have increased at both our breweries in Shanghai and Hainan as summer sales were particularly strong in the past months. Our Hainan operations have turned in profits with Anchor beer being the market leader there. Contribution from our 21% stake in Kingway Brewery was also one of the factors that halved our losses in China in the last fiscal year," said Mr Koh.

Barring unforeseen circumstances, growth for the Group is on track as our strong business fundamentals and brand equity will enable us to conquer new markets and intensify penetration into existing markets.

Sales for Indochina grew by 14%. PBIT would have risen by 12%; however, a S$6.1 million write-back of tax provision last year for Cambodia and higher losses for the brewery in North Vietnam during its first year of operation caused PBIT to increase only 3%, at S$85.3 million.

New Zealand is a mature market that has shown steady growth with sales growing 2%. Driven by higher sales and a stronger NZ$, PBIT increased by 34%, or S$11.7m, to S$46.2 million, the company said. On 8 Oct, APB announced the completion of its compulsory acquisition of the remaining minority interests in DB Breweries Limited ("DB"), thereby gaining 100% control over DB.

Singapore: PBIT, at S$43.9 million, improved by 1%. Revenue generated from domestic operations was lower than last year due to a drop in sales as the result of a shrinking domestic market (market shrunk by 3%) and lower selling price due to a reduction in excise duties.

Papua New Guinea: The growth in sales (+2%) was driven by an improved economy. PBIT grew by 25% or S$25.6 million, mainly due to strong sales and a strong Kina.

Malaysia: Sales grew by 3% over last year. PBIT, at S$16.4 million, grew by 21% due to higher sales and lower marketing and overhead expenses.

Thailand operations achieved a 7% growth in sales. However, PBIT declined S$2.9 million or 25% due to higher marketing expenses and higher depreciation from the brewery expansion. The increase in capacity will allow for higher production and sales in the coming years.

In China, sales increased significantly compared to last year due to the strong performance from our Shanghai and Hainan operations. Overall, China losses reduced by 50% to S$8.3 million as: Hainan Asia Pacific Brewery Co (HAPCO) achieved profit as compared to a loss last year; lower losses were incurred in Shanghai; profit contribution was received from Kingway Brewery Holdings Ltd (KBH), an associated company acquired in February 2004 by Heineken-APB (China) Pte Ltd (HAPBC).


12 November, 2004