Revenues up as APB braves Chinese challenges

An Asian brewing powerhouse has braved a challenging six months in some markets to achieve a 14% hike in revenues. Asia Pacific Breweries (APB) reported losses in its Chinese and south Asian operations today but said it had seen an overall rise in fortunes bringing the group’s revenue to just under US$775million.
The Singapore-based group says profits gained organically by 20% in the first half of the financial year ending 31^st March, tipping attributable net profit before exceptional items (APBE) to just below the US$70.1million mark.
After translation differences and start up costs of greenfield sites in Laos, Mongolia and India are taken into account this figure translates to a 14% hike, bringing APBE to a little over US$66million, says the company. APB says earnings per share rose by US$0.21.9 to US$0.25.5 over the period.
While APB has seen growth of 29% in profits from its domestic market, volume In China has dipped and the company has reported losses of more than US$5.3million. It puts this down to “intense competition, a shift in product mix and increases in raw material prices” in China.
Losses of more than US$4million in Sri Lanka, India and Mongolia have been put down to brand launches in Maharashtra in India and gestation losses from greenfield breweries in Hyderabad, India and the Mongolian capital Ulan Batar. 
Despite the challenges in some areas, APB chief executive Koh Poh Tiong was upbeat about his company’s performance. He said: "Our results were very satisfactory and demonstrated the resilience of our core business in the face of pressures from severe competition and significant increases in raw material prices.”
He branded the Indochinese markets, including Cambodia, Vietnam and Laos, as APB’s “star performer” with the area accounting for 52% of the company’s profit before interset and tax. The region saw a profit increase of 21%, a figure the company says would have been 31% if it were not for gestation losses at its Laotian brewery, opened in March. Compared to the same period last year volume rose by 16% in the area. 
Koh added: “I am particularly pleased that Singapore achieved a 4% increase in domestic sales in a largely mature market. This showed that, with the right strategies, our wide portfolio of complementary brands are winning over consumers in Singapore despite the plethora of competitive brands jostling for a share of throat. Overall as a Group, positive momentum has been created and we will continue building on it."
Oceania – comprising New Zealand and Papua New Guinea – accounted for 39% of the company’s profits before interest and tax. The firm says that in New Zealand profits grew by 9% - organically by 4% - while volume increased 3%. In Papua New Guinea volume grew by 8% while profits increased by 7%.
This week APB announced that a new man would be taking over the helm of its Chines operations. Lee Meng Tat replaces former regional director for China Huang Hong Peng, who has been made regional director at APB's head office. Lee - former deputy director for operations in the Middle Kingdom - will oversee all aspects of the firm's Chinese business and investments.