E-Malt.com News article: 2171

Australasian drinks group Lion Nathan Ltd reconfirmed on February 9 its earnings guidance of NPAT (from operations) for the 2004 fiscal year of between $195 and $200 million, following a solid performance from its Australian beer business in the first quarter (ended 31 December 2003).

Total beer volumes for the group for the three month period were up 1.8 % to 275.8 million litres. Lion Nathan Australia’s volumes were flat compared with the same period last year, while Lion Nathan China’s volumes grew strongly. Total wine case sales were up 2.8 per cent with solid growth from Wither Hills and Argyle. In Australia, domestic wine volumes were ahead of last year but continuing competitive pressure adversely impacted export sales volumes and margins – particularly to the United Kingdom.

In Australia, the overall beer market declined slightly, however cost initiatives, continued positive mix shift and relatively stable pricing has the business on track to deliver EBITA growth for the year of between five and seven per cent – in line with previous guidance. Competitive pricing and slightly lower than expected volumes adversely impacted New Zealand beer margins. Chinese volumes were strong, however margins were impacted by competitive pricing and mix shift as lower margin mainstream beer grew at a faster rate than the premium brand portfolio. Contribution from the wine business was in line with expectation and ahead of the same period last year.

Commenting on the first quarter performance, Lion Nathan CEO, Gordon Cairns said: “The year has got off to a solid start although we remain concerned about the impacts of competitive pricing in New Zealand. On the basis of the performance for the first four months of the year, we are comfortable with the earnings guidance that we provided at our Annual General Meeting on 17 December. As disclosed at that time, first half earnings growth will be below the rate implied for the full year and NPAT (from operations) is expected to be flat although underlying business performance remains solid.”


11 February, 2004