Hong Kong: China Resources Enterprise, Limited, a state-backed conglomerate that makes beer and operates supermarkets, announced on November 18 its third-quarter ended 30 September, 2004 earnings fell. The Group’s unaudited consolidated turnover for the third quarter and nine months ended 30 September, 2004 amounted to HK$12,389.0 million and HK$35,029.7 million respectively, both representing an increase of 39.9% over the same period of last year. The Group’s unaudited consolidated net profit attributable to shareholders for the third quarter of 2004 fell 9.4% to HK$337.0 million whereas that for the nine months ended 30 September, 2004 rose 1.5% to HK$1,139.0 million. The beer operation saw its profit bubble 13 percent to HK$78.4 million.

The retail business continued its growth momentum with earnings reaching HK$82.1 million in the first three quarters, as compared with a net loss of HK$111.5 million for the same period of 2003. In particular, the supermarket division demonstrated sustainable improvement with net earnings of HK$5.3 million and HK$45.6 million respectively for the third quarter and nine months ended 30 September, 2004, as compared to respective net loss of HK$20.7 million and HK$86.8 million for the corresponding period in 2003. Strong profit recovery was driven by effective pricing strategy, optimized composition of merchandises, growing contribution from Suguo as well as substantial increase in suppliers’ rebate.

The beverage business recorded earnings growth of 12.7% and 42.8% for the third quarter and nine months ended 30 September, 2004 over the corresponding period of last year. Strong organic growth, helped by the increase in average selling price and aggressive promotion as well as satisfactory contribution from newly acquired breweries were attributable to the substantial growth in earnings. In the first three quarters of the year, the operation recorded a 21.3% sales volume growth of beer to approximately 2.6 million kilolitres. Sales volume of “Snow’’ rose 35% to approximately 727,000 kilolitres over the same period of last year. To create an integrated identification of the national brand “Snow” with the company name, the Group has renamed its beer investment holding company, China Resources Breweries Ltd., as China Resources Snow Breweries Ltd.

China Resources Breweries, a joint venture with global giant SABMiller , is the second-largest brewer in China after Tsingtao Brewery . China Resources shares, a member of Hong Kong's blue-chip Hang Seng Index have gained 38 % in the past year, outperforming the 15 % rise in the index, according to Reuters.

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