By Andrew Starke
Lion Nathan has reported sales volume growth of three per cent for the first nine months of its financial year, with the solid performance of its beer division offset by a dip in wine revenues.
The brewer, which is set to be acquired by Japan’s Kirin, said it was on track to meet its guidance for a fiscal 2009 net profit between $305 million and $315 million, excluding costs associated with the takeover.
Lion Nathan grew its beer profits by five per cent on the back of what it called ‘strong growth’ by Hahn Super Dry and Boag’s Draught brands and ‘continued growth’ of XXXX Gold, and the Tooheys trademark.
The company said Hahn Super Dry 3.5 – a mid-strength, low carbohydrate beer launched during the third quarter – had delivered encouraging results.
There was some ‘softening of volumes’ in New Zealand in the third quarter ended June 30, but this was consistent with market trends.
However key markets for Lion Nathan wine continued to be adversely impacted by the deterioration in economic conditions.
While volumes were marginally up on last year, the increased cost of promotions and consumers trading down to cheaper wines resulted in a net decline in sales revenue.
“The investments we have made in our business since 2004 have created a stronger and more flexible business,” Lion Nathan chief executive Rob Murray said.
“Our people have remained focussed and it is particularly pleasing that we are on track for a significant profit step up in 2009, despite weaker economic conditions and an uncertain outlook for many consumers.”
Lion Nathan’s share price was $11.70 at midday today (Jul 17), up from $11.61 seven days ago.