Asahi’s profit fore­cast below es­ti­mates amid slow­ing econ­omy

The Pak Banker - - COMPANIES/BOSS -

Asahi Group Hold­ings Ltd., the Ja­panese brewer of Su­per Dry, fore­cast 2016 profit that trails an­a­lyst es­ti­mates as a slow­ing econ­omy weighs on do­mes­tic sales.

Net in­come will prob­a­bly be 80 bil­lion yen ($697.4 mil­lion) for the year end­ing De­cem­ber 2016, up 4.7 per­cent from 2015, the Tokyo-based com­pany said in a state­ment Tues­day. That com­pares with the av­er­age es­ti­mate of 89 bil­lion yen from 10 an­a­lysts com­piled by Bloomberg. Sales are ex­pected to grow about 0.7 per­cent, it said.

A higher yen is ex­pected to cut into the com­pany's prof­its in 2016 when it repa­tri­ates earn­ings from its over­seas op­er­a­tions which make up about 13 per­cent of Asahi's to­tal sales, said Man­ag­ing Di­rec­tor Yoshi­hide Okuda at a post-earn­ings press con­fer­ence in Tokyo Tues­day.

Asahi is among Ja­panese brew­ers look­ing to ex­pand abroad to counter fall­ing do­mes­tic con­sump­tion amid a stag­nant econ­omy, shrink­ing pop­u­la­tion and chang­ing con­sumer tastes. Ja­pan's cen­tral bank un­veiled neg­a­tive in­ter­est rates last month as it seeks to spark growth in the coun­try.

The com­pany said last month that it's con­sid­er­ing mak­ing an of­fer for SAB­Miller Plc's Peroni and Grolsch brands in Europe. Okuda de­clined to com­ment on the deal Tues­day. "We will do M&As that will en­hance our cor­po­rate value re­gard­less of whether or not they're in or out of Ja­pan," he said at the briefing.

Asahi, which also sells spir­its and non-al­co­holic bev­er­ages and owns about 20 per­cent stake in China's Ts­ing­tao Brew­ery Co., said it is also con­sid­er­ing buy­ing U.S. soft drinks com­pany Talk­ing Rain and the Nikkei news­pa­per re­ported in De­cem­ber that it could cost about 50 bil­lion yen,.

The com­pany plans to tar­get a div­i­dend pay­out ra­tio of 30 per­cent by 2018 as well as at least 10 per­cent re­turn on equity in the three years through 2018, ac­cord­ing to the Tues­day state­ment.

Asahi also an­nounced that Akiyoshi Koji, the head of its beer sub­sidiary, will be­come group pres­i­dent, re­plac­ing Naoki Izu­miya who has been ap­pointed chair­man. He will re­tain his post as chief ex­ec­u­tive of­fi­cer. Net in­come at the Ja­panese beer maker rose 11 per­cent to 76.4 bil­lion yen in 2015, the com­pany said.

Asahi's shares closed 3 per­cent lower at 3,625 yen in Tokyo trad­ing be­fore the an­nounce­ment. The bench­mark Topix slumped 5.5 per­cent.

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