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Lion Nathan reiterates profit forecast as beer sales rise

Thursday 24th July 2008

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Lion Nathan, the brewer of Steinlager and Speights beer, reiterated its forecast for a full-year profit of A$265 million to A$275 million, reflecting increased sales and the costs of an Australian acquisition.

Profit last year of A$282 million was boosted by the sale of the company's Auckland brewery. New Zealand beer volumes rose 1.8% to 129 million litres in the first nine months of the year, while Australian volumes rose 3.7% to 550 million litres.

Revenue and volumes rose "during arguably more difficult economic conditions during the last nine months," chief executive Rob Murray said in a statement. Profit in 2009, before one-time items, may rise to A$295 million to A$315 million, he said.

The results underpin the brewer's resilience in a slowing economy. Lion's New Zealand shares have gained 4% this year while the benchmark NZX 50 fell 21%. Still, costs for raw materials including barley will rise between A$30 million and A$36 million in 2009, it said.

Lion is 46% owned by Kirin Holdings, Japanese biggest beverage company. The company last year acquired Tasmanian brewer J. Boag & Son.

By Jonathan Underhill

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