KEY POINTS:
Japanese-owned brewer Lion Nathan said today its New Zealand operations had returned to growth after two static years despite the sluggish economy.
The Australian-based company said its half year group operating net profit rose 7 per cent to A$167.7 million ($209 million).
It said strong revenue growth in
the first half would continue, with a "significant step up" expected in 2009.
New Zealand operating Ebit (earnings before interest and tax) rose 4.2 per cent to $54.8 million. Volumes rose and revenue was driven up by brand growth, especially the recently launched premium brand Steinlager Pure.
"The pleasing return to growth reflects a successful implementation of the strategic plan based on a differentiated `one business' model and a renewed innovation programme," the company said.
"The overall LNNZ result was driven by strong performances from the beer, wine and RTD (ready to drink) portfolios with only the spirits component lower than the prior period.
"An unusually hot summer along with the timing of Easter trading also assisted the result."
"Power" brands volume grew 7.2 per cent propelled by Steinlager Pure as well as strong performances by premium brands Corona and Mac's and robust Speights growth.
LNNZ domestic beer volume grew 3.1 per cent in the year to date against estimated market growth of 1.5 per cent, while Lion Nathan international brands volume grew 7.8 per cent with combined volumes up 3.4 per cent.
Speights volumes rose 6.5 per cent while Lion Red volume declined and Waikato Draught volume rose 4.2 per cent.
Overall packed beer volumes continued to grow more than 6 per cent but tap volumes declined almost 7 per cent which was a major factor in the Lion Red volume decline of around 5 per cent.
Steinlager Pure had significant growth despite selling at higher prices to other premium brands.
Wine volumes increased 8.8 per cent with Delegats Varietals, Oyster Bay and Imprint brands leading the growth. The wine portfolio was added to by the acquisition of three champagne brand agencies to replace the Moet brand agency which ended in February 2008.
Lion Nathan chief executive Rob Murray said the group's strong revenue growth experienced in the first half was set to continue, driven by volume growth, new product development and positive mix.
"Boag's is now fully integrated and is a focus for growth," the company said.
"The company's major capital expenditure initiatives are on track and debt refinancing is progressing well.
"The NPAT (pre-significant items) guidance range for the 2008 year remains at A$265-275 million, with a significant step up in earnings in FY09."
Japan's Kirin Breweries owns 46 per cent of Lion Nathan.
Lion shares last traded in New Zealand on $10.20. They have traded as high as $11.25 (February 4) and as low as $9.30 (July 30) in the last year.
- NZPA