China News Service, August 19th. On the 19th, China Resources Beer (Holdings) Co., Ltd. (HKEx stock code: 00291) announced its 2020 interim results. China Resources Beer's consolidated turnover in the first half of 2020 was RMB 17.408 billion, a decrease of 7.5% from the same period last year. Earnings before interest and taxes and profit attributable to shareholders of the company for the first half of 2020 were RMB 2.79 billion and RMB 2.079 billion, representing an increase of 6% and 11.1% respectively over the same period last year. The board of directors declared an interim dividend of RMB 0.128 per share (Interim 2019: RMB 0.12 per share).
Hou Xiaohai, CEO of China Resources Beer, said: "China Resources Beer continues to implement a series of high-quality growth measures with the strategic management theme of'decisive battle high-end, quality development', and actively implements the decisive battle high-end measures. China Resources Beer will continue to leverage on the Heineken Group Long-term strategic cooperation, promote the listing of international brands, enhance the brand competitiveness of China Resources Beer in the high-end market, and continue to explore high-end beer marketing methods to build high-end professional talent teams, Chinese brands and international brand portfolios, expand commanding heights, channel marketing, Measures such as the key account business model have enhanced China Resources Beer’s competitive position in first-tier cities."
The novel coronavirus epidemic broke out in China at the beginning of 2020, and the beer market was greatly affected during the epidemic. Since the end of March, the epidemic situation in most areas has initially eased, and the response level has been gradually lowered. The repeated epidemics in Northeast and Beijing have been quickly and effectively controlled, and the beer market has gradually returned to normal. Affected by the epidemic, the overall beer market capacity dropped significantly compared with the same period last year.
It is reported that during the epidemic, China Resources Beer has overcome the difficulties of epidemic prevention and control, adopting remote office or after obtaining the approval of local governments, and under the prerequisite of ensuring the lives and health of employees, it will make overall arrangements for the resumption of work and production. At the same time, China Resources Beer seeks development in the face of adversity and launched a number of sales measures during the epidemic, such as organizing and promoting the establishment of a channel model for large customers, expanding high-end channels for catering, night markets and non-spot drinks, and enhancing the capabilities of high-end sales teams to enhance the market Competitiveness enables rapid recovery after the epidemic eases. China Resources Beer's overall beer sales have recovered in the second quarter and have increased compared to the same period last year. In the first half of 2020, China Resources Beer's overall beer sales were approximately 6.039 million kiloliters, a decrease of 5.3% from the same period last year, and its performance was relatively better than the industry level.
In the first half of 2020, despite the impact of the epidemic, the sales of mid-to-high-end beer dropped by 6.2% compared with the same period last year. However, thanks to the introduction of Heineken® international brands last year and the sales of various grades of beer resumed growth in the second quarter, the second-high-end beer in the first half of 2020 Sales of beer and above increased by 2.9% over the same period last year, and the product structure was further improved. In addition, China Resources Beer is also promoting non-bottle sales in more regions. Taking the above factors into account, the overall average selling price dropped by 2.4% from the same period last year. At the same time, due to the implementation of bottle-free sales and the decline in sales, the impact of the increase in sales costs caused by the improvement of product structure was offset, and the overall cost of sales fell by 11.3% compared with the same period last year. Based on the above factors, the overall gross profit in the first half of 2020 fell 1.3% from the same period last year to RMB 7.03 billion.
Administrative and other expenses in the first half of 2020 decreased by 6.2% compared with the same period last year. China Resources Beer continued to implement capacity optimization in the first half of the year, and related asset impairments increased compared with the same period last year. In addition, employee compensation and placement costs related to capacity optimization and organizational reengineering decreased by RMB 322 million from the same period last year.
China Resources Beer continues to enrich its product portfolio. In the second quarter of 2020, the high-end product Heineken® Star SilverTM beer will be launched. Together with the two high-end new products launched last year, Snow Mars Green Beer and Black Lion White Beer, it further supports the development and improvement of high-end Brand.
In the first half of 2020, the confirmed impairment of fixed assets was RMB 263 million. Among them, China Resources Beer continued to promote the optimization of its production capacity layout and ceased operation of two breweries in the first half of the year. As of the end of June 2020, 72 breweries were operated in 25 provinces, cities and districts in Mainland China, with an annual production capacity of approximately 19.6 million kiloliters.
The executive director of China Resources Beer simply stated that, despite the impact of the epidemic in the first half of the year, China Resources Beer continued to carry out long-term strategic cooperation with Heineken Group, launching more Heineken® international high-end products, and seizing opportunities for the development of China's high-end beer market. In the face of the prevention and control of overseas epidemics and the risk of repeated domestic epidemics, China Resources Beer will prepare for the challenges that the epidemic may bring.