E-Malt.com News article: 3301

Hong Kong: Harbin Brewery, owned by Anheuser-Busch, announced a 68.7 % drop in first-half profit. The company posted net earnings of HK$14.33 million for the period, down from HK$45.76 million a year ago, despite turnover rising to HK$780 million from HK$658.2 million. The decline was attributed to a one-time expense from a general offer proposed by its major shareholders earlier this year. Harbin Brewery is China’s fourth largest brewer, which will be delisted from the Hong Kong main board after the acquisition is completed, American City Business Journals Inc. posted on September 22.

The company said increased administrative and selling expenses eroded margins. Selling, administrative and other operating expenses surged to HK$273.7 million from HK$187.1 million, leading to a 32.6 per cent fall in operating profit to HK$62.7 million.

Administrative expenses rose due to one-off charges as a result of the general offer by Anheuser-Busch, while the increased selling expenses were due to the expanded distribution network and bigger sales force. “While the company is currently under the process of privatisation and will withdraw its listing status from the Stock Exchange of Hong Kong upon completion of relevant procedures, its presence in the consumer market offering quality beer products will prevail,'' Harbin said.

In March, beer giants Anheuser-Busch and SABMiller slugged it out for Harbin Brewery. Anheuser-Busch's winning offer of HK$5.58 per share represented almost 50 times Harbin's 2003 earnings and about five times its price-to-book value. Once the acquisition is completed, Harbin will apply to withdraw from its listing.


22 September, 2004