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China Resources Beer H1 profit up 93.4%, lags forecast

[HONG KONG] China Resources Beer (Holdings) Co Ltd on Monday posted a 93.4 per cent rise in first-half net profit thanks to higher average selling prices and improving sales due to warmer weather.

The solid performance reaffirmed that Chinese breweries are on the road to recovery following stagnated beer consumption in recent years.

"Though we have come across short-term challenges brought by the cost pressures, the group believes that it can continue to make steady progress and become a trusted and beloved beer enterprise," Chairman Chen Lang said in a statement.

The owner of Chinese beer brand Snow posted a profit of 1.17 billion yuan (S$239.11 million), slightly lagging forecasts of 1.25 billion yuan by Thomson Reuters SmartEstimate. It reported a restated 605 million yuan profit for the same period a year ago.

Revenue increased 3.7 per cent to 15.77 billion yuan, from 15.21 billion yuan in the year-ago period.

Beer sales volume increased 2.9 per cent year-on-year to 6.31 million kilolitres amid favorable weather conditions. Average selling prices increased 0.8 per cent.

The Chinese brewer, which completed its purchase of a 49 per cent stake it did not already own in China Resources Snow Breweries last October, said it would increase mid- to high-end beer products to meet demand for high-quality drinks.

The bigger rival of Tsingtao Brewery said earlier this year that uncertainties in the economic outlook would remain amid changes in political and economic policies in some key regions.

Shares of China Resources Beer slid 2.2 per cent after the results, lagging a 0.5 per cent gain in the benchmark index .