Lion Nathan, Australia's second largest brewer, reaffirmed its full-year forecast of little change in profit today, but warned of the effect of commodity prices.
Lion Nathan said it aimed to consistently achieve 5-8 per cent revenue growth and 7-10 per cent growth in earnings before interest and taxes
(EBIT).
"However, F07/F08 outlook impacted by commodity headwinds," the company noted, saying the price of aluminium, used for drink cans, continued to trade above long-term average prices.
It said it had fully hedged its aluminium costs for the 2007 business year and was 30 per cent hedged for 2008. It was fully hedged for sugar prices in 2007 and 50 per cent hedged for 2008.
Capital management initiatives remained on hold due to corporate development activities, chief financial officer Jamie Tomlinson said.
Lion Nathan suspended a buyback of up to 5 per cent of its issued capital in November while it was bidding for New Zealand's privately held Independent Liquor Ltd. It dropped its bid in December, saying the price was too high.
Tomlinson said capital management plans would be clarified when the company releases its full-year earnings in November.
Last week Lion Nathan said it would relocate and build a new brewery in Auckland at a cost of A$250 million, and had agreed to sell the site of the current plant for A$162 million to AMP Capital Investors.
The New Zealand redevelopment would lead to estimated annual savings in earnings before interest, tax, depreciation and amortisation of A$10 million to A$15 million, it said today.
Lion Nathan shares were up almost 1 per cent at A$8.52 in early trade in Australia, and were 0.5 per cent higher at A$9.45 in New Zealand.
- REUTERS
