CHINA: Snow boosts China Resources Enterprise FY results

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SABMiller JV sees beer sales rise by 14% to HK21.5bn (US$2.7bn)
Group net sales up by 35%
Net profits up by 25%
Eyes more acquisitions

Consumer thirst for the Snow beer brand has helped China Resources Enterprise to report strong rises in net sales and profits for 2010.
The group’s beer division, which operates via the CR Snow joint venture with SABMiller, reported net sales up by 14% for the 12 months to the end of December, to HKD21.5bn (US$2.7bn). Beer volumes rose by 11%, while net profits for the division increased by 27% on the previous year, to HKD685m, China Resources Enterprise (CRE) said today (24 March).
“By enhancing the product mix and fine-tuning the selling prices in certain regions, average selling prices and gross margins both increased during the year,” said the firm, which owns 51% of CR Snow, versus SABMiller’s 49% stake. It claims that CR Snow is China’s largest brewer, with a volume share of 21%.
The strong performance helped CRE to report a 35% increase in net sales for the 12 months, to HK86.7bn. Group net profits increased by a quarter on 2009, to almost HK3.1bn.
In addition to beer, CRE also reported strong growth in its soft drinks business, which recently agreed a joint-venture with Japan’s Kirin Holdings. In 2010, CRE’s soft drinks sales rose by 31% to HK2.1bn, while net profits increased by 7.6% to HK155m.
“Its flagship purified water brand, ‘C’estbon’, continued to enjoy a leading market position in Guangdong, and achieved strong sales growth in Hunan and Sichuan due to enhanced marketing campaigns and distribution channel management,” said the group.
CRE also reported net sales rises of 11.6% and 51% in its food and retail divisions respectively. During the year, it opened a wine retail chain named ‘Voi_la!’.
“Looking ahead, we expect to see a robust retail market environment in China,” said CRE’s chairman, Qiao Shibo. “We will continue to actively look for opportunities to develop and strengthen our core businesses through acquisitions and organic growth.”