The Australian beer and wine group Lion Nathan, based in Antipodean, has registered an 11.2% increase in its full year (to September 30) net profits to A$180.1 million, on the back of strong performances in its beer divisions. The result, widely expected by the market, was built upon ongoing cost reductions and an improved performance by its Chinese brewing operations. CEO Gordon Cairns said he expected similar growth rates in this financial year. "Our aspiration is for another year of NPAT growth," he said. "I'm in the A$195-200m range." The forecast was described as "conservative" by some analysts but Mr Cairns said there were two potential danger signs: a repeat of pre-Christmas price discounting by rival Foster's Group and tough market conditions for wine producers.

Analysts warned that Lion remained a questionable "growth story" as its share of the Australian beer market was expected to remain static around the 42 per cent mark and up to $10 million in cost savings were forecast to drive 2003-04 profit growth.

The company’s sales rose 6.7% to A$1.83 billion from A$1.71 billion a year earlier.

Mr Cairns called the results a high quality outcome “in what has been, at times, a challenging environment." In particular he was referring to tough conditions in Asia following the outbreak of SARS earlier this year.

The beer divisions in New Zealand and Australia drove the figures forward, with EBITA from its Australian beer division up 5% to A$330.5 million, while earnings from New Zealand rose 4.6% to NZ$96.9m.

The total beer operations delivered EBITA, up 9.1% to A$406.1m.

Encouragingly, the Chinese beer operations seem to be turning a corner. After reporting losses for seven years, the Chinese business reported a 30% jump in volume growth in the latest year, helping to halve losses to A$6.2m. EBITDA was at breakeven.

07 November, 2003