Reuters Australia
Brewer Lion Nathan reaffirms profit outlook
Thursday July 24, 11:48 AM
(Adds details)
MELBOURNE, July 24 (Reuters) - Australia's second-largest brewer, Lion Nathan (ASX: LNN.ax) , reported 7 percent growth in nine-month sales revenues on Thursday and reaffirmed its earnings guidance for the full year and for 2009.
Lion Nathan, 46 percent-owned by Japan's Kirin Brewery Co 2503.T, confirmed its net profit forecast of A$265 million to A$275 million ($255 million to $264 million) for the year ended Sept. 30, including a one-off item linked to its Boag's brand.
"The company remains confident of its ability to step up earnings in the 2009 financial year consistent with analysts' expectations of operating NPAT (pre significant and one-time items) in the range of A$295 million to A$315 million," it said in a quarterly update.
That was in stark contrast to its bigger rival Foster's Group Ltd FGL.AX, which cut its profit forecasts last month and launched a search for a new chief executive and a review of its wine business after warning it would write down the value of the business by up to A$700 million.
Lion Nathan warned that costs continued to be a challenge and confirmed it expected cost increases of around A$30 million to A$36 million in fiscal 2009.
Revenue grew around 7 percent for the nine months to June 30. Total beer volumes rose 3.3 percent to 686 million litres from its brands including Boag's, Tooheys, Hahn and "XXXX" and new products like Hahn Super Dry and Barefoot Radler.
In New Zealand, Lion Nathan's beer volumes rose 1.8 percent to 129 million litres in the first nine months, but volume growth slowed in the third quarter after a strong, hot summer.
Lion Nathan's wine volumes rose 6.8 percent even though sales to the United States were lower than forecast as it sold a distribution business to Constellation Brands STZ.N.
"Market conditions continue to present challenges to the wine industry, with currency levels and lower consumer spending particularly in the U.S. and UK, impacting upon international growth expectations," Lion Nathan said.
Lion Nathan shares have fallen 8 percent so far this year, heavily outperforming Foster's, which has dropped 26 percent so far this year. ($1=1.040 Australian Dollar) (Reporting by Sonali Paul, editing by Mark Bendeich)
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