Australia: Foster's says profit rises 90% on beer, asset sales and cost savings
Foster's Group Ltd., Australia's biggest beer and winemaker, said first-half profit rose 90 percent on higher beer prices, asset sales and cost savings in its wine unit, Bloomberg reported February 20.
Net income rose to A$553.5 million ($435 million), or 27 cents a share, in the six months ended Dec. 31 from A$291.1 million, or 15 cents, a year earlier, Melbourne-based Foster's said in a statement today. The earnings include A$190 million in one-time gains from selling its breweries in Vietnam.
Chief Executive Officer Trevor O'Hoy expects to save A$165 million a year from annual wine costs as he uses his 55 percent share of the Australian beer market to start new beer brands and raise prices for labels such as Victoria Bitter. With a glut of Australian wine depressing prices, O'Hoy has fired staff and sold vineyards to reduce debt after paying A$3.2 billion for winemaker Southcorp Ltd. in 2005.
“In our Australian beer business, Crown and Corona remain Foster's top premium performers while Pure Blonde and Carlton Draught continue their extraordinary growth,'' O'Hoy said in the statement. `”18 months on from the Southcorp acquisition, the integration is now substantially complete.''
Profit before items rose 11 percent to A$363 million in the half, compared with expectations for profit of A$402 million, according to the median estimate of four analysts Bloomberg News surveyed by telephone and e-mail.
Foster's shares closed yesterday at A$7.14 and have gained 3.2 percent this year. The stock has surged 31 percent since Aug. 28, when the Sydney Morning Herald reported it may be a takeover target. Foster's has twice said the company hasn't received an approach.
O'Hoy restructured the company's global operations based on three geographic regions, rather than products, after selling breweries in Vietnam, China and India. In May, he sold the Foster's brand in Europe to Scottish & Newcastle Plc.
Foster's had previously run separate domestic and international beer units and a global wine business. The wine unit, the second-largest in the world behind Constellation Brands Inc., includes brands such as Penfolds and Rosemount.
Earnings before interest and tax in Australia and the Asia Pacific rose 2.5 percent to A$442.2 million.
The Americas had a 17 percent increase in earnings to A$143.1 million.
Earnings from Europe, Africa and the Middle East rose 9.9 percent to A$38.7 million.
Înapoi
(libra 0.9219 sec.)