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Original Source: FD (FAIR DISCLOSURE) WIRE
KOUICHI IKEDA, CHAIRMAN AND CEO, ASAHI BREWERIES: [Translated]. Good afternoon. As was introduced, I am Ikeda, Chairman and CEO. Thank you for your attendance, despite the demands of your busy schedule.
I would like to give you the Group operations overview for the first half of 2006, as well as some future business policies, after which President Ogita, our COO, will explain Asahi Breweries' alcohol business. I will begin with the overview of the financial results, starting with page one of the presentation PowerPoint.
Although net sales for Asahi Breweries went down in the interim financial results for the first half of 2006, the increase in net sales for Asahi Soft Drinks and Asahi Food & Healthcare, and in the two LB companies and Wakodo, that were acquired by M&A, contributed to the total consolidated net sales going up by 1.2% year on year, to JPY664.4b.
In operating income, Asahi Soft Drinks continued to register a stable increase, while Asahi Breweries could not reach its target and was down 7.1% year on year, at JPY28.6b.
Tingyi-Asahi-Itochu Beverages Holding, TAI Beverages, continues to do well. But with the introduction of the accounting method for the impairment of assets starting this term, the interim net income was down 23.8% year on year, to JPY14.5b.
Based on these interim results, we have revised the business forecast for the full year.
In net sales, we aim to grow the core business of the Group, with the aggressive turnaround in Asahi Breweries at the same time as the results of the M&A investments will be added on to achieve an increase of 4.1% year on year, of JPY1.488 trillion in total.
The operating income will also be revised downwards from the original plan. But centered around the increased profits in Asahi Breweries, we will aim to achieve an increase of 5.8% year on year, of JPY95.5b. Moreover, in net income, since the impairment losses will be curtailed further, we are forecasting a record high JPY45b in this category, far exceeding the original plan.
The details of the financial results will be explained by our Financial Officer later.
Please refer to page three now, for the overview of the first half of 2006 and for the future business policies. This is the biggest challenge, which is the domestic alcohol business, the growth of the beer and beer-type beverages business will receive priority emphasis of the management resources in order to rebuild our growth foundation.
Against a backdrop of the beer market showing positive growth for the first time in six years during the first half of 2006, we have also achieved a 50% market share for the first time in beer. But the decline in Happoshu, the low-malt beer, was substantial, and therefore could not expand our market position in the overall beer and beer-type beverages.
However, since May new products are transitioning favorably, so there is a change in the trend. In the latter half of the year we will launch new products in order to recover the sales momentum.
President Ogita will give you the details on the domestic alcohol business later.
In the Group business, Asahi Soft Drinks achieved 4% growth, outperforming the industry average, with its core brands, Wanda, Mitsuya and Juroku-Cha.
Structural reforms in production, logistics and procurement have also been promoted in order to consolidate a stable revenue basis and further make a leap forward. In the future, we will aim to demonstrate the synergy effect with the two LB companies involved in the chilled drinks business that we have entered into full-scale operation last year, so that we can further strengthen the growth foundation of the domestic soft drinks business.
As for Food & Healthcare, Asahi Food & Healthcare's core products, MINTIA and BALANCEUP, have continued to grow. And the new diet product, Slim up Slim, has become a hit product, with sales exceeding the target.
Although we have had to make slight downward revisions in profits due to some change in product composition and increasing costs and advertisement investments, we will aim to further expand the revenue basis for the Food & Healthcare business, making it the third pillar of the Group operations, leveraging the impact from Sunwell and the newly consolidated Wakodo.
With regard to the overseas business, as was announced already, a construction of a new plant for the beer …