Japan: Asahi Breweries' pretax profit falls on weak beer sales

Asahi Breweries Ltd. reported on February 10 its consolidated pretax profit dropped in the year ended in December due partly to a fall in beer sales but posted a record-high net profit thanks to a smaller one-time loss, according to Kyodo News.

Pretax profit declined 4.4 percent to 91.46 billion yen on sales of 1.43 trillion yen, down 1.0 percent. But net profit jumped 30.3 percent to 39.87 billion yen due to a steep decline in extraordinary losses as compared with a year earlier.

Japan's sales of new beer-like beverages tripled, but that was not sufficient to drive the growth of the overall beer market, which posted a 3 percent fall in unit sales, the company said. Due partly to sluggishness in the overall beer market, Asahi's group sales of alcoholic beverages fell 5.5 percent to 1.03 trillion yen.

Asahi's unconsolidated pretax profit dived 13.3 percent to 76.91 billion yen on a 5.6 percent slide in sales to 1.05 trillion yen, while net profit surged 25.9 percent to 35.50 billion yen. It plans to raise the dividend payout for the second half of fiscal 2005 by 2 yen to 9.50 yen per share, resulting in an annual total of 17 yen.

For the current fiscal year ending in December, consolidated pretax profit is expected to climb 14.2 percent to 104.50 billion yen and net profit 11.6 percent to 44.50 billion yen on 4.5 percent sales growth to 1.50 trillion yen.

Despite a shrinking domestic beer market due to an ageing population and a falling birthrate, Asahi issued a bullish overall beer sales outlook for 2006, saying it aimed for a 3.4 percent rise after a fall of over 5 percent in 2005. The sales include regular beer, low-malt "happoshu" and low-priced beer-like drinks, or so-called "third-type" beer.

"We won't neglect happoshu and third-type beer but we will prioritise the regular beer business, because that is where we were the strongest," Senior Managing Director Yoshihiro Goto said on the sidelines of a news conference.

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