Asia Pacific Breweries Limited (APBL)

• Group APBE rose 48% to S$134.7 million
• Group PBIT grew 45% to S$250.2 million
• Group revenue gained 17% to S$1.25 billion
• Newly acquired businesses in Indonesia and New Caledonia performing in line with expectations

Today, Asia Pacific Breweries Ltd (APB) announced a significant 45% or S$77.5 million gain in Group profit before interest, tax and exceptional items (PBIT) to S$250.2 million for the six months ended 31 March 2010. Group attributable net profit before exceptional items (APBE) advanced strongly by S$43.7 million or 48% to S$134.7million.

Group revenue grew to S$1.25 billion, which is 17% higher than the same period last year, mainly due to higher volumes.

Earnings per share before exceptional items rose from 35.3 cents to 52.2 cents. Net asset value per share gained 26 cents to S$4.26 while net tangible assets (NTA) per share decreased from S$3.17 to S$1.77 when compared to September last year. The reduction in NTA is mainly due to an increase in intangible assets arising from the acquisition of breweries in Indonesia and New Caledonia and the Bintang brand.

The Directors have recommended an interim dividend of 14 cents per share, tax exempt (one-tier), to be paid on 23 June 2010.

Mr Roland Pirmez, Chief Executive Officer, APB said, "The demand for our beers remained strong in the second quarter although the growth rate has moderated as compared to the first quarter."

"For the six months under review, our largest PBIT contributor, IndoChina (comprising Cambodia, Laos and Vietnam) continued to be the Group's key driver of organic growth. The region, which accounted for 52% of APB’s total PBIT, recorded an impressive PBIT gain of 38% that grew on the back of a 30% volume increase."

"Papua New Guinea and Singapore each contributed about 16% to Group PBIT and reported PBIT increments of 8% and 6% respectively. The former enjoyed better margins from price increases while the latter benefited from improved export performance," elaborated Mr Pirmez.

New Zealand registered a PBIT growth of 52% mainly due to a 4% volume gain, a favourable sales mix and the appreciation of the New Zealand dollar.

Malaysia's PBIT increased 33%, owing to a 9% volume growth and lower marketing expenditure. Meanwhile, Thailand's PBIT rose 9% due to lower marketing expenditure and overheads as well as a 1% volume increase.

Mongolia recorded a PBIT of S$2.3 million as compared to a loss of S$9.1 million. This was attributable to a volume increase of 59% and an exchange gain of S$1.5 million from the currency realignment of the US dollar loans compared to an exchange loss of S$8.6 million last year.

On 10 February 2010, APB completed its acquisition of an effective interest of 68.5% in PT Multi Bintang Indonesia, Tbk (MBI) and 87.3% in Grande Brasserie de Nouvelle Caledonie S.A. (GBNC); as well as the disposal of its loss-making wholly-owned India operations. The Group has consolidated the earnings of MBI and GBNC while it ceased consolidation of the India operations. Excluding the transaction cost of the acquired businesses, the acquisitions added $15 million to Group PBIT.

Last month, APB announced that it has further raised its effective interest in MBI to 80.6%. This comprises a direct stake of 75.1% and an indirect stake of 5.5% (i.e via depository receipts) in MBI. Mr Pirmez commented, "GBNC and MBI are strong businesses and are now contributing to APB's bottomline. This is in line with expectations and creates shareholder value as well as supports the Group’s strategy of operating in markets where it has clear competitive advantages."

Outlook

The Group continues to trade well amidst the highly competitive market conditions in which it operates.

With the completion of the acquisition of businesses in Indonesia and New Caledonia and disposal of the India business, there has been a fundamental improvement in the geographical mix of the Group's operations. The new businesses are performing in line with expectations.

Operations Review (YTD)

Singapore
PBIT rose 6% despite a volume fall of 7%. The result was attributable mainly to better performance from the export sector. The transfer of management and distribution of Tiger Beer in the United Kingdom to Heineken UK has contributed to the volume decline and profit improvement.

Malaysia
PBIT jumped 33% on the back of a 9% volume growth and lower marketing expenditure.

Papua New Guinea
PBIT grew 8%, owing to better margins from price increases. This was despite a 3% dip in sales volume arising from liquor bans imposed in several regions.

New Zealand
PBIT improved 52% due mainly to a 4% volume gain; favourable sales mix and the appreciation of the New Zealand dollar.

Indochina (Laos, Cambodia and Vietnam)
The group continued its strong performance with PBIT and volume increments of 38% and 30% respectively. Excluding translation losses and gestation losses for Lao APB, PBIT grew organically by 49%.

China
PBIT losses for our operations were reduced by 53% to S$4.6 million. The improved performance was attributable to favourable sales mix and lower overheads.

Thailand
PBIT grew 9% which was attributable to lower marketing expenditure, lower overheads and a volume improvement of 1%.

South Asia (India and Sri Lanka)
As a result of the concluded sale of our India businesses in February 2010, India results for January 2010 was classified under loss from discontinued operations and the Group has ceased to consolidate their results from February onwards.

As a consequence of the above development, volume fell 46% and PBIT losses were reduced to S$5.1 million from S$6.1 million last year.

Mongolia
Volume jumped 59%. PBIT improved to S$2.3 million compared to a loss of S$9.1 million last year. This was attributable to an exchange gain of S$1.5 million from the currency realignment of the US dollar loans compared to an exchange loss of S$8.6 million last year. Excluding the impact from foreign exchange, PBIT would be S$0.8 million compared to a loss of $0.5 million achieved for the same period last year.

Indonesia and New Caledonia
The Group's acquisition of PT Multi Bintang Indonesia, Tbk (MBI) and Grande Brasserie de Nouvelle Caledonie S.A. (GBNC) was completed on 10 February 2010. With the consolidation of their results, MBI and GBNC contributed S$15 million to the Group's PBIT, before deduction of transaction costs.

Corporate Office
Corporate office expenses were higher than last year due mainly to transaction costs relating to the acquisition of MBI and GBNC offset by higher royalty income.

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