China results keep InBev profitable
interests in the China market have been one of the key factors that
has helped it achieved a 5.5 per cent growth in its net profits for
the first six months of the year, despite overall volumes in the
Asia Pacific region falling and a lack lustre performance in
Western Europe.
The news comes after a year in which InBev, which changed it name from Interbrew following its recent merger with Brazilian brewery AmBev has been fiercely acquisitive in the Asia Pacific region, with four of its five newly acquired busineses falling within the region. Those businesses included Lion Group, KK Group and the Beck's operation in China, as well as 45 per cent option on the South Korean Oriental Brewery.
As a whole the group reported a net profit of €205 million, which compared favourable with the €171 million in the first half of 2003. Sales rose 7 per cent to €3.5 billion. The company said that the results did not include the €9.2 billion transaction for AmBev which was only finalised two weeks ago.
In the Asia Pacific region as a whole total production volumes fell by 2.8 per cent, which the company said was due to a 4.2 per cent drop in volumes in the South Korea market. This meant that overall net turnover fell 3.1 per cent to €230 million, with EBIT falling 11.6 per cent. The company pointed out that results in the region are mainly driven by South Korea, where it said that the combination of market decline and share pressure had resulted in lower profitability.
InBev's business operations performed significantly better, though. Total volume in the first half of 2004 grew by 16 per cent to 6.3 million hecolitres. The newly acquired Lion Group was particularly encouraging, the company said, with volume growth of over 20 per cent. This, it was stated, was due to the smooth integration of the operations into InBev's operations in China.
The China results also contrast strongly with the company's results in western Europe where beer sales were impacted by weakened consumer spending - a factor that has impacted results for all the major international brewers.
