China Resources profit beats estimates as beer sales rise
China Resources Enterprise Ltd. (291), the government-backed partner of SABMiller Plc. (SAB), reported better than expected profit in 2011 amid higher sales in its beer business.
Net income was HK$2.83 billion ($365 million) in the year ended Dec. 31, a decline of 50 percent from HK$5.67 billion which included a HK$3 billion gain from the sale of its brand- fashion distribution business interest, the company said in a filing to Hong Kong’s stock exchange today. That compares with the average estimate of HK$2.45 billion from 12 analysts surveyed by Bloomberg news.
Sales climbed 26 percent to HK$110.2 billion as China Resources expanded its beer and retail business by buying rivals to tap the country’s growing domestic consumption as incomes rise. China plans to raise the minimum wage level by an average of at least 13 percent annually in the years through 2015, according to the national 12th Five-Year Plan. Urban disposable income rose 14 percent to about 21,810 yuan ($3,500) last year.
China Resources now operates more than 4,000 stores in the world’s most populous nation, it said in the statement.
The company expects a “challenging” environment in China with consumer sentiment affected by global economic uncertainty and the European debt crisis. China Resources shares fell 0.84 percent to HK$29.50 at 1:28 p.m. in Hong Kong.
The contribution to net income from the retail division, whose business consists of mainly supermarkets, fell 10 percent to HK$1.74 billion. Sales grew 27 percent to HK$70.1 billion.
Profit at the beer division, which makes China’s best- selling Snow beer with SABMiller, rose 15 percent to HK$785 million. Sales climbed 24 percent to HK$26.7 billion.
The food unit’s profit fell 34 percent to HK$278 million.
The board recommended a final dividend of HK$0.32 per share, bringing the total dividend for 2011 to HK$0.47 per share.
Anheuser-Busch InBev NV (ABI), Yanjing Brewery and China Resources Snow Brewery Co. have been picked to bid in the final round for Kingway Brewery Holdings Ltd. (124) assets, two people with knowledge of the matter said on March 3. Kingway, a Guangdong province-based beermaker, invited the three bidders to make a final offer as early as mid-April for its six breweries, they said. China Resources Snow Brewery is a joint venture between SABMiller and China Resources.