Brewer warns Sars may sour business
Tsingtao Brewery reported steady first-quarter profit growth yesterday but warned the Sars outbreak would have a negative impact on business.
The mainland's largest brewery said net profit for the period was up 7.44 per cent year on year to 59.71 million yuan (about HK$56.34 million), based on Chinese accounting standards.
The company attributed the growth to cost controls and increased sales, with first quarter sales rising 11 per cent to 630,000 tonnes.
But it said sales had slowed in some locations recently as a result of the Sars outbreak.
'Due to the uncertainties over Sars, the market will be even tougher in the second quarter,' the company said.
Tsingtao Brewery H shares closed down 6.4 per cent to HK$5.10 yesterday. Its Shanghai-traded A shares rose 3.3 per cent to 9.02 yuan.
First-quarter turnover rose 12 per cent to 1.62 billion yuan while operating profit climbed 12 per cent to 479.56 million yuan.
Gross profit margin was 29.54 per cent.
The company said it was looking at measures to counter the negative impact of the Sars outbreak.
'We will accelerate our expansion into regions not yet affected by Sars to sustain our share of the mainland's beer market,' it said.
Tsingtao achieved a mainland market share of 12.5 per cent last year. The company said it would also boost marketing and advertising efforts to attract more consumers.
Last year, Tsingtao beer sales rose 21 per cent and it posted a 166 per cent rise in net profit to 222.55 million yuan.
ON THE HOP
Tsingtao Brewery said net profit for the period was up 7.44 per cent year on year to 59.71 million yuan (about HK$56.34 million)
First-quarter turnover rose 12 per cent to 1.62 billion yuan and operating profit jumped 12 per cent to 479.56 million yuan
Tsingtao achieved a mainland market share of 12.5 per cent last year