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E-Malt.com News article: Japan: Asahi Group Holdings expects first-half net income to beat initial estimates
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Asahi Group Holdings Ltd., Japan’s biggest beer maker by market value, said net income for the six months ended June 30 probably beat its initial estimate by 44 percent on strong sales of its non-alcoholic beverages in its home market, and better-than-expected performance overseas, Bloomberg reported on July 26.

First-half net income rose to 28.5 billion yen ($274 million) from the forecast of 19.8 billion yen given in February, Asahi said in a preliminary earnings statement on July 26. The brewer raised operating profit forecast by 18 percent to 52.4 billion yen, and revenue forecast by 0.4 percent to 863.7 billion yen, also citing lower raw material costs and improved utilization of assets.

“This kind of upward revision is rare for Asahi so it is pretty positive for its shares,” said Satoshi Fujiwara, an analyst at Nomura Securities Co. The Tokyo-based brewer “is improving the product mix with a bigger focus on coffee and tea, which are more profitable than water, for example.”

Asahi is seeking expansion overseas to counter slumping beer consumption in Japan, and in April clinched a 2.55 billion ($2.8 billion) euros deal to buy the Peroni, Grolsch and Meantime beer brands in Europe from Anheuser-Busch InBev NV. Domestically, the Japanese brewer managed to sell more non-alcoholic drinks such as canned coffee and bottled tea, as well as “Clear Asahi,” a low-malt beer, said spokesman Takuo Soga.

Asahi has been making great efforts to boost profitability, including by cutting costs, as it doesn’t expect a big increase in domestic demand, Nomura’s Fujiwara said. Low wage growth have led Japanese consumers to spend less on entertainment, travel and recreation, a setback for Prime Minister Shinzo Abe’s efforts to revitalize the economy.

Asahi’s improved first-half net income forecast is still 28 percent lower than the 39.5 billion yen it booked in the same period a year earlier. The brewer of Super Dry beer will report first-half results Aug. 3, during which it will also provide earnings forecasts for the full year, it said in the statement.


26 July, 2016

   
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