Japan: Asahi reports 18% decrease in operating profit for Q3 of 2005

Asahi Breweries, Japan's biggest brewer, announced an 18 percent drop in its third-quarter operating profit as sales slowed, and kept its full-year forecast for profit to be little changed.

Japanese brewers face a shrinking domestic market due to a falling birthrate and an ageing population, which has led to a decline in total beer sales, Reuters reported on October 27.

Asahi , posted a group operating profit of 32.73 billion yen ($282.4 million) in the three months to September, against 39.68 billion yen a year earlier. The figures were calculated by Reuters based on the company's nine-month results. It maintained a full-year operating profit forecast of 101.5 billion yen, which would be 0.2 percent up from 2004. Analysts on average project a profit of 99.65 billion yen, in a poll of 12 analysts by Reuters Estimates.

To resist a shrinking market, breweries have introduced so-called "third-type" beers, or beer-like drinks, since 2004 but have had limited success in increasing total sales of beer-related products.

Japan's second-largest brewer, Kirin Brewery is due to announce its nine month financial results on Nov. 11, and third-ranked Sapporo Holdings will announce on Oct. 28. The top three brewers all lowered their full-year forecasts in August.

After Japan's biggest brewer reported an 18 percent fall in its third-quarter operating profit as sales slowed, Asahi Breweries Ltd. drops 3.3 percent to 1,429 yen Reuters reported on October 28.

KBC Securities Japan analyst Doug Scott said in a report dated October 27 that the brokerage is not optimistic about the outlook with the chance of alcohol tax rises next year.

"Forecasts have been left unchanged but the company will need to put in a stellar Q4, with OP up 41 percent and the OPM rising to 9.6 percent compared with 6.0 percent in Q4 last year, to meet its forecasts," he said EAccess Ltd. at 74,500 yen, up 1.5 percent, trimming much of its earlier gains after the broadband wholesale provider said it has ended talks with Tokyo Electric Power Co. about buying the utility's fixed-line phone service provider, Fusion Communications.

Business daily Nihon Keizai reported on Friday that the wholesale broadband provider would likely buy Fusion Communications for a little over 15 billion yen ($130 million).The report sent shares in eAccess as high as 78,200 yen, up 6.5 percent, before it said the talks were off.

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