E-Malt.com News article: 3601

Australia, Sydney: Lion Nathan’s Australasian based alcoholic beverages business announced on 4 November 2004 it had again underwrote a solid operating result. Net Profit after Tax (NPAT), before significant items, grew 12.5 % to $202.7 million. Operating cash flow was up 2.5 % on the same period to $274.0 million.

During the year Lion Nathan took a number of significant strategic initiatives and reviewed the carrying value of its assets which had one off impacts on the reported result for the 2004 fiscal year. The major items were the sale of its Chinese beer business (realising a profit of $104.1 million), the sale of its Victorian hotel portfolio, HMC (a loss of $34.2 million) and a $71.5 million write down in the carrying value of its Australian wine business. The net financial impact of all of these significant items was a loss of $42.6 million, reducing reported NPAT to $160.1 million.

The Australian beer business, which includes brands Tooheys New, Hahn Premium Light and XXXX Gold, performed well with growth in core brands and mix shift to higher margin premium brands driving Earnings Before Interest, Tax and Amortisation (EBITA) (before significant items) up 6.8 per cent to $352.9 million. Following a number of years of growth, New Zealand earnings declined by 5 per cent, reflecting an increase in competitive pressure. Lion Nathan China delivered very strong volume and revenue growth; however, earnings were put under pressure by the rapid pace of consolidation in the Chinese beer market. EBITAS (before significant items, SGARA and non recurring items) for the Wines & Spirits Group was up 16.7 per cent as margin and mix improved in key markets.

Solid operating cash flows ensured that Lion Nathan’s financial position was strengthened. Before significant items, gearing (net debt / book value of equity) improved from 58 per cent to 51 per cent while interest cover (also before significant items) strengthened slightly – to 4.5 times. Net debt levels were reduced to $1,282 million and fell further, following receipt of sale proceeds from China of US$73.1 million, which were received after 30 September 2004.

In line with the Company’s dividend policy, of paying out 70 per cent of core earnings, total dividends for the year have been set at 29 cents per share. An interim dividend of 14 cents per share was paid on 23 June and a final dividend of 15 cents per share will be paid on 13 January 2005. This represents a 7.4 per cent increase on the prior year. Both dividends are fully franked.


06 November, 2004