Japan: Sapporo Holdings net profit decreased 35.6% because of falling sales

Sapporo Holdings, the holding company for Sapporo Breweries, reported that net profit tumbled by 35.6 pct last year because of falling sales of its beers and beer-like drinks, according to AFX News Limited, February 16.

Sapporo Holdings posted net profit of 2.3 bln yen for last year, down from 3.6 bln yen for 2005.

The company said that its shipments of conventional beers had fallen by 2 pct to 37.15 mln cases, its shipments of low-malt 'happoshu' had fallen by 9 pct to 10.05 mln cases and its shipments of 'third-sector' drinks had fallen by 24 to 16.63 mln cases. One case contains 20 633 milliliter bottles.

This meant that revenue fell by 4 pct to 453.1 bln yen and that operating profit dropped by 16 pct to 8.6 bln yen.

'Third-sector' drinks taste like beer but are made of peas and so taxed at a lower rate. They originated at Sapporo Breweries but its rival, Kirin Brewery Co Ltd (nasdaq: KNBWY - news - people ), has recently became the largest producer of this kind of drink.

Sapporo Breweries recently entered the market for distilled spirits made of yam, oats and rice, but this has failed to counter declines in its sales of beer and beer-like drinks.

The company assumes that its sales of 'third-sector' beverages will grow by 29 pct this year and that its shipments of beer will increase by 5 pct. On this basis, it forecasts for this year a 41 pct rise in net profit to 3.3 bln yen and a 59 pct rise in operating profit to 13.7 bln yen on an 11 pct rise in sales to 484 bln yen.

(1 usd = 119.36 yen)

21 February, 2007