Suntory Beverage Profit Almost Doubles on Cost Cuts, Weaker Yen
Stock Chart for Suntory Beverage & Food Ltd (2587)
Suntory Beverage & Food Ltd. (2587), the drinks maker that started trading in July after Japan’s largest public offering this year, reported first-half profit almost doubled as it pared costs and benefited from a weaker yen.
Net income surged 96 percent to 12 billion yen ($122 million) in the six months ended June from a year earlier, the beverage maker said today. Sales climbed 11 percent to 518 billion yen.
The weaker Japanese yen boosted sales at Suntory Beverage by 30 billion yen, Executive Officer Nobuhiro Yasui said at a press conference in Tokyo today. The currency has fallen about 12 percent against the dollar this year as Prime Minister Shinzo Abe pushed for monetary easing and economic stimulus measures.
The cost reduction helped boost operating profit at its domestic business by 32 percent to 16.9 billion yen in the first half, the company said. Net income also benefited from a special profit of about 3 billion yen from an insurance gain and the reevaluation of some bottling assets, the company said.
President Nobuhiro Torii said last month the company could spend as much as 500 billion yen on acquisitions and will start internal discussions on targets as early as September.
The beverage group bought France-based Orangina Schweppes Group for 300 billion yen in 2009 and paid 600 million euros in the same year for New Zealand’s Frucor Beverages Group.
The parent Suntory Holdings Ltd., which remains unlisted, owns about 60 percent of the soft drink company. Suntory Beverage shares have risen 17 percent from its IPO price.
Suntory Beverage listed on the Tokyo Stock Exchange on July 3 after the biggest initial public offering in Japan this year. The beverage group raised about $4 billion by selling shares at 3,100 yen each, priced near the low end of the indicative range amid volatile market conditions.
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