Japan: Sapporo Holdings anticipates higher profits

Sapporo Holdings Ltd. up 3.3 percent to 726 yen after Merrill Lynch lifted its rating on Japan's third-biggest brewer to buy from neutral and set the target price of 900 yen, Reuters reported December 11.

Merrill Lynch analyst Ritsuko Tsunoda wrote in a note to clients on Friday the brokerage expects Sapporo's earnings to bottom out from the business year ending December 2007, with the medium-term business plan targeting lower fixed costs.

"We anticipate a robust 29 percent increase in (calendar 2007) operating profit, with contribution from the acquisition of Canada-based Sleeman and higher rental income from property development," she said.

The Sapporo Breweries Ltd. unit of Sapporo Holdings said in October it succeeded in its bid to buy up Canadian Sleeman Breweries Ltd., in a deal worth C$300 million ($265 million).

14 December, 2006