Asia Pacific Breweries profit up 65% to S$261mln

Revenue grew 26% to S$2.5bln as the group attributes growth to IndoChina region’s contribution, accounting for 48% APB’s PBIT.

Asia Pacific Breweries Ltd (APB) announced on Thursday a significant 58% or S$184 million gain in Group profit before interest, tax and exceptional items (PBIT) to S$500 million for the full year ended 30 September 2010. Group attributable net profit before exceptional items (APBE) also advanced strongly by S$103 million, or 65% to S$261 million.

Group revenue for the year increased almost 26% to S$2.5 billion. Earnings per share before exceptional items rose 39.9 cents to S$1.01. Net asset value per share gained 38 cents to S$4.38 while net tangible assets (NTA) per share fell from S$3.13 to S$1.82 when compared to the previous financial year. The reduction in NTA is mainly due to goodwill arising from the acquisition of breweries in Indonesia and New Caledonia.

Directors have recommended a final net dividend of 52 cents per share, which together with the interim dividend of 14 cents per share, brings total net dividend for the year to 66 cents per share. This final dividend, if approved by shareholders, will be paid on 18 February 2011.

Mr Roland Pirmez, Chief Executive Officer of APB said, "We are rounding off The Year of the Tiger with a remarkable profit growth that was driven organically as well as by the new acquisitions in Indonesia and New Caledonia. Organic growth was driven by a continuing robust beer demand in Vietnam and improved sales in New Zealand.”

“IndoChina (comprising Cambodia, Laos and Vietnam) continues to be our largest PBIT contributor and key driver of organic growth. The region, accounting for some 48% of APB’s total PBIT, reported an impressive 48% PBIT gain that grew on the back of a 28% volume increase."

"Singapore and Papua New Guinea each contributed about 16% to Group PBIT and reported PBIT increments of 16% and 3% respectively. The former saw improved domestic and export performance while the latter enjoyed better margins from price increases," elaborated Mr Pirmez.

New Zealand recorded a PBIT of almost S$31 million, nearly threefold that of the year before. This was largely due to a 4% volume gain, a favourable sales mix and the appreciation of the New Zealand dollar.

In Mongolia, PBIT improved to hit S$5 million as volume grew 53%. It also benefited from an exchange gain of almost S$3 million from the currency realignment of the US dollar loans.

Malaysia reported a PBIT growth of 38% while Thailand saw a five-fold increase in PBIT to almost S$5 million. They experienced volume growth of 10% and 2% respectively. Compared to a loss of S$6million the year before, China broke even during the year under review.

With the acquisition of PT Multi Bintang Indonesia, Tbk (MBI) and Grande Brasserie de Nouvelle Caledonie S.A. (GBNC) as well as the divestment of its loss-making Indian operations earlier this year, APB was able to further improve its bottom line and strengthen its brewery network in the Asia Pacific region. The consolidation of earnings from the two new businesses added S$56 million to Group PBIT during the financial year.

Mr Pirmez commented, "Being established businesses in their respective markets, MBI and GBNC are valuable PBIT contributors to the APB Group. During the year in-review, their eight-month consolidated results make up 11% of Group PBIT.”

While integrating its new PBIT contributors, APB remained focused on driving organic growth in its markets. During the year, as APB continued to optimise its brand portfolio as well as initiate marketing strategies to increase demand for its beer brands, it ensured current and future beer supply is met through capacity enhancements at existing breweries.

In Danang, Vietnam, a new bottling line was commissioned in August 2010. Apart from meeting robust and surging beer demand there, the facility has also sharpened the competitive edge and efficiency of the operations.
In Papua New Guinea, a brew house and canning line have been added to the brewery in Lae in March 2010 to further capitalise on the growth potential of the beer market there.

Other new canning lines installed within the APB Group include those in Mongolia and Sri Lanka in December 2009 and June 2010 respectively.

Meanwhile, a Greenfield brewery in Guangzhou, China is undergoing the final stages of construction. The APB Group will increase its brewery count to 37 when the plant is commissioned in December 2010.