The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms.
Hop Market in RussiaGermany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.
APB Reports 34% Rise in ANP in First Quarter
•Profit before interest and taxation gained 29% to S$267.9 million
•Revenue grew 16% to S$994.3 million
Asia Pacific Breweries Ltd (APB) is pleased to announce a strong performance for the first quarter ended 31 December 2011.
Outperforming last year, attributable net profit (ANP) gained S$39 million or 34% to S$154.7 million. Profit before interest and taxation (PBIT) grew S$60.4 million or 29% to S$267.9 million. Group Revenue increased 16% to S$994.3 million.
Excluding translation differences, the impact of acquisition1 and disposal2 and gestation loss3 from Guangzhou greenfield brewery last year, organic APBE and PBIT grew 31% and 29% respectively.
Mr Roland Pirmez, Chief Executive Officer, APB commented, “Beer price increases and robust beer sales in most of our regional markets were the reasons behind the 16% top line gain. The double-digit volume growth in Vietnam drove our sales in Indochina while Indonesia and Papua New Guinea led volume growth in South & Southeast Asia and Oceania respectively. As a result, IndoChina and Thailand generated 38% of Group revenue while South & Southeast Asia and Oceania recorded 31% and 30% respectively.”
IndoChina (i.e. Vietnam, Cambodia and Laos) and Thailand retained its top spot as the Group’s largest PBIT contributor at 45%. The region reported a PBIT gain of 18%, driven by an 18% rise in volume, improved margins from price increases in Vietnam and a favourable sales mix in Cambodia.
Oceania (i.e. New Zealand, Papua New Guinea, New Caledonia and Solomon Islands) reported a PBIT increase of 48%. Continued strong consumer demand in Papua New Guinea, favourable translation gain from a 17% appreciation in the Kina as well as contributions from the newly acquired brewery in Solomon Islands attributed to the robust performance of the region. Oceania accounted for 28% of Group PBIT.
PBIT from South & Southeast Asia (i.e. Singapore, Export Markets, Malaysia, Indonesia and Sri Lanka) grew 18%, owing to double-digit volume growth in Indonesia, Export Markets and Sri Lanka as well as improved margins from price increases. The region contributed 26% to Group PBIT.
North Asia (i.e. China and Mongolia) recorded a 66% rise to S$0.3 million in PBIT with improved margins resulted from the restructuring of China operations to focus on the international premium brand strategy.
Operations Review (1st Quarter)
South & Southeast Asia (Singapore, Export Markets, Malaysia, Indonesia and Sri Lanka)
The region delivered volume growth of 9%, with gains in all operating markets except contract brew operations and Singapore domestic sales where wet weather conditions dampened sales marginally. PBIT grew 18% on the back of double digit volume growth in Indonesia, Export Markets and Sri Lanka, as well as improved margins from price increases.
Indochina (Vietnam, Cambodia and Laos) and Thailand
The region witnessed overall volume growth of 18%, led by strong double digit growth in Vietnam as well as Cambodia, offset by an 11% fall in Thailand due to the flood crisis.
PBIT grew 18%, driven by higher volume, better margins from price increases in Vietnam and favourable sales mix in Cambodia. Excluding translation losses, arising mainly from the 12% weakening in the Vietnamese dong, PBIT grew organically by 31%.
North Asia (China and Mongolia)
PBIT for the region increased 66% to S$0.3 million. The Group’s operations in China reported improved margins following the restructuring of investments to focus on a premium brand strategy. The performance for both periods was impacted by currency realignment of US dollar loans. Excluding such currency impact, PBIT would have been S$1.8 million this quarter and a loss of S$1.4 million last year’s same quarter.
Oceania (New Zealand, Papua New Guinea, New Caledonia and Solomon Islands)
PBIT for the region jumped 48%. However, volume grew by a modest 3% due to challenging market conditions in New Zealand. The robust PBIT performance was driven mainly by continued strong consumer demand in Papua New Guinea, favourable translation gain from a 17% appreciation in the Kina, as well as positive contributions from the newly acquired brewery in Solomon Islands from June 2011.
On a comparable basis, excluding the results from Solomon Islands and translation gain, PBIT grew organically by 30% whilst volume dipped 1%.
Corporate office reported PBIT of S$3.6 million for this quarter mainly due to higher royalty income, lower provision for existing employee share-based and business development expenses.
The recent economic uncertainties may dampen consumer demand. With a high proportion of the Group’s earnings from outside Singapore, the reported financial results will continue to be sensitive to currency movements in the countries where the Group operates.
As announced on 13 July 2011, the Sale of Interest in Heineken-APB (China) Pte Ltd (“Proposed Transaction”) is subject to anti-monopoly examination by the relevant PRC authorities. The Company has been informed by the Purchaser, China Resources Snow Breweries Limited, that the anti- monopoly examination has been extended. While the Company expects the PRC Anti-Monopoly Bureau to make a ruling before the end of February 2012, in line with the stipulated timelines under the Anti-Monopoly Law in PRC, there is no certainty that the Proposed Transaction will be approved by the Anti-Monopoly Bureau.
1 On 6 June 2011, the Group acquired 97.7% of the share capital of Solomon Breweries Limited in the Solomon Islands.
2 On 5 May 2011, Heineken-APB (China) Pte Ltd, a joint venture company of APB, divested its stake in Kingway Brewery Holdings Limited.
3 Gestation loss refers to the first three years’ results from Greenfield brewery in Guangzhou (Guangdong, China).
14 Feb. 2012