Fosters Shrugs Off Crisis In Asia

Fosters Brewing Group, Australias largest brewer, on Monday defied gloomy forecasts by announcing steady first-half earnings. Losses in its Asian operations because of the financial crisis in the region were not as great as feared, and the group also overcame tax costs of more than A$50 million (US$33.5 million) by using up tax credits related to past costs. Pre-tax profits rose 17 per cent to A$283 million in the first half to December, helped by strong beer sales in the domestic market. After-tax profits, however, slipped 1 per cent to A$168 million, mainly because of increased tax costs amounting to A$47 million. The figure was still ahead of many analysts expectations, largely as a result of a one-time tax benefit arising from restructuring during the period. The fact that our tax bill increased by A$47 million without any significant reduction in net profit is a tremendous achievement, said Ted Kunkel, chief executive. Fosters Asian operations saw losses rise from A$11.4 million in the previous first half to A$21.6 million. Much of the losses were associated with the groups three China breweries and start-up costs related to its new operations in Vietnam and an Indian joint venture.