Asia Pacific Breweries profit rises 61% to $384mln

Except for $1.8mln loss in China operations, PBIT of operations in other regions soared.

Asia Pacific Breweries Ltd (APB) announced yet another strong performance for the nine-month period ending 30 June 2010. APBE gained S$80.4 million or 61% to S$212.2 million. PBIT, at S$387.4 million, was S$127.3 million or 49% higher than last year. Revenue for the first nine months stood at S$1.9 billion. This was a 24% increase as compared to the same period last year.

Mr Roland Pirmez, Chief Executive Officer, APB said,"For the nine months under review, the APB Group continued to benefit significantly from high-growth IndoChina (comprising Cambodia, Laos and Vietnam) that boosted volume and PBIT by 28% and 35% respectively. Malaysia also turned in an outstanding performance with a 32% increase in PBIT as compared to last year due to a 7% volume growth and lower marketing expenditure. Another factor contributing to PBIT improvement was the newly acquired businesses in Indonesia and New Caledonia that added more than 11% to Group PBIT.”

Including results from discontinued operations New Zealand more than doubled its PBIT to S$27.3 million, owing to a 4% volume gain, favourable sales mix and the appreciation of the New Zealand dollar.
Meanwhile, Thailand witnessed a 32% rise in PBIT due to lower marketing expenditure and overheads as well as a 1% volume improvement.

PBIT for Singapore rose 10% while that for Papua New Guinea posted a 3% growth. The former benefited from better export performance while the latter benefited from higher profit margins as a result of price increases.

Volume in Mongolia grew 71%. Combined with an exchange gain of S$1.4 million from the currency realignment of the US dollar loans, PBIT amounted to S$4.0 million. The Sri Lanka operations also turned in a volume growth of 37%.

The newly acquired businesses of APB, PT Multi Bintang Indonesia, Tbk (MBI) and Grande Brasserie de Nouvelle Caledonie S.A (GBNC) were also key contributors to the Group’s strong performance for the period under review. Together, their consolidated results contributed S$43.1 million to Group PBIT, before deduction of transaction costs.

Outlook
The Group continues to trade well in the highly competitive markets in which it operates.

With the completion of the acquisition of businesses in Indonesia and New Caledonia and disposal of the India businesses, there has been a fundamental improvement in the geographical mix of the company’s operations. The new businesses are performing in line with expectations.

Barring any unforeseen developments, the company expects the organic growth to continue in the next quarter.

Operations Review (YTD)

Singapore
Despite a marginal dip in overall volume, PBIT rose 10%. This improvement was attributable mainly to better performance from the export operations as a result of the transfer of the management and distribution of Tiger Beer in the United Kingdom to Heineken UK.

Malaysia
PBIT rose 32% on the back of volume growth of 7% and lower marketing expenditure.

Papua New Guinea
PBIT grew 3%, owing to better margins from price increases. This was despite a 4% dip in sales volume arising from liquor bans imposed in several regions.

New Zealand
PBIT more than doubled to $27.3 million due mainly to a 4% volume gain, favourable sales mix and the appreciation of the New Zealand dollar.

Indochina
The region, particularly Vietnam, continued its strong performance with PBIT and volume increments of 35% and 28% respectively. Excluding translation and gestation losses for Lao APB, PBIT grew organically by 45%.

China
PBIT losses for APB's operations in China were pared down 74% to $1.8 million. The improved performance was attributable to favourable sales mix and lower overheads.

Thailand
PBIT grew 32%. This was attributable to lower marketing expenditure, lower overheads and a volume improvement of 1%.

Sri Lanka
Despite a volume growth of 37%, PBIT, at a loss of S$0.6 million, was comparable to the same period last year due to higher price of raw materials and higher marketing expenditure.

Mongolia
Volume improved 71%. PBIT rose to $4.0 million compared to a loss of S$6.7 million last year. This was attributable to an exchange gain of S$1.4 million from the currency realignment of the US dollar loans compared to an exchange loss of S$5.9 million last year. Excluding the impact from such exchange differences, PBIT would be S$2.6 million compared to a loss of S$0.8 million achieved for the same period last year.

Indonesia and New Caledonia
The Group’s acquisition of PT Multi Bintang Indonesia, Tbk (MBI) and Grande Brasserie de Nouvelle Caledonie S.A. (GBNC) were completed on 10 February 2010. With the consolidation of their results, MBI and GBNC contributed $43.1 million to the Group’s PBIT, before deduction of transaction costs.

Corporate Office
Corporate office expenses were higher than last year. This was mainly attributable to higher marketing and business development expenditure partially offset by higher royalty income.

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