China Resources profit beats estimates

HONG KONG: China Resources Enterprise Ltd, the governmentbacked partner of Sabmiller Plc, reported better than expected profit in 2011 amid higher sales in its beer business.

Net income was Hk$2.83bil (Us$365mil) in the year ended Dec 31, a decline of 50% from Hk$5.67bil which included a Hk$3bil gain from the sale of its brand-fashion distribution business interest, the company said in a filing to Hong Kong’s stock exchange. That compares with the average estimate of Hk$2.45bil from 12 analysts surveyed by Bloomberg.

Sales climbed 26% to Hk$110.2bil 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% annually in the years through 2015, according to the national 12th Five-year Plan. Urban disposable income rose 14% to about 21,810 yuan (US$3,500) last year.

China Resources now operates more than 4,000 stores in the nation.

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% to HK$29.50.

The contribution to net income from the retail division, whose business consists of mainly supermarkets, fell 10% to Hk$1.74bil. Sales grew 27% to Hk$70.1bil.

Profit at the beer division with Sabmiller, rose 15% to HK$785 million. Sales climbed 24% to Hk$26.7bil. — Bloomberg