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Japan brewer Asahi Group ups full-year outlook after Europe brand purchase

Published 03/08/2017, 10:09
© Reuters. FILE PHOTO: Man walks past the logo of Asahi Group Holdings at the company's headquarters in Tokyo
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By Sam Nussey

TOKYO (Reuters) - Japan's Asahi Group Holdings Ltd (T:2502) raised its full-year earnings outlook on Thursday, boosted by the inclusion of the eastern European beer brands it acquired from Anheuser-Busch InBev NV (BR:ABI) earlier this year.

Asahi said it now expected operating profit to rise 22.2 percent to 167.3 billion yen ($1.51 billion) for the year through December, compared with an earlier forecast of 146 billion yen.

The company also raised the outlook for its annual dividend payment to 69 yen per share from 60 yen per share.

Operating profit for the six months through June grew 34 percent to 70.7 billion yen as the beer maker digested the $8 billion European deal that closed in March, the largest-ever overseas beer deal by a Japanese brewer.

While Asahi's home market remains its profit mainstay, the brewer is pinning hopes on its overseas acquisitions for growth.

Asahi has spent around 1.2 trillion yen buying up beer brands in eight European countries from AB Inbev, the world's biggest brewer, who sold off assets to appease regulators during its $100 billion acquisition of SABMiller (LON:SAB).

Targeting higher-yielding assets and with its focus on the expanded European operations, Asahi has been reviewing businesses where it holds minority stakes. In June, it announced it would sell its 20 percent stake in Chinese brewer Tingyi-Asahi Beverages Holding Co Ltd for $612 million.

Asahi is not the only Japanese brewer seeking growth overseas. Sapporo Holdings Ltd (T:2501) on Thursday said it would buy Californian brewer Anchor Brewing Co for $85 million as it looks to bolster its U.S. operations.

Sapporo also reported operating profit fell 1 percent to 3 billion yen in the six months through June due to rising costs.

© Reuters. FILE PHOTO: Man walks past the logo of Asahi Group Holdings at the company's headquarters in Tokyo

(This story corrects Sapporo's Anchor acquisition price to $85 million from $33 million in the penultimate paragraph.)

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