Japan: Analysts about the main 3 Japanese brewers’ performance so far

The 3 major Japanese brewers suffered declines in their group operating profits in the January-September period, due to lower sales of beer and low-malt beer, as well as rising costs according to the analysts of Nikkei.

Whereas all three, kept their projections for the fiscal year through December unchanged, Asahi Breweries and Sapporo Holdings could not be able to meet their goals because sales of beer products remain much lower than expected. Kirin had a declining operating profit by 6% to 85.4 billion yen. It managedto absorb declines in sales of beer and low-malt beer through brisk shipments of beer-like alcoholic beverages, also known as third beers. Though, higher promotional expenses of 7.2 billion yen and poor results at a cold-beverage subsidiary put a squeeze on profits.

On the other side, Sapporo and Asahi failed to make up for slow beer sales by shipping more third beers. As a result, group operating profit plunged 18% to 63.5 billion yen at Asahi and a whopping 72% to 5 billion yen at Sapporo. For the full year through December, Kirin projects a 1% increase in group operating profit to 110 billion yen, while Asahi expects it to remain flat at 101.5 billion yen.

The key point to if Kirin will be able to beat the forecast rests in the extent to which it can absorb the waning sales of cold beverages through higher shipments of alcoholic beverages. Sales at Asahi declined by 4% during the January-September period, falling 1% short of its full-year projection.

Still, Sapporo predicts a 42% decline in the operating profit to 13.7 billion yen, but the decline could be even lower.

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