Asahi Group Holdings Ltd. could save about ¥30 billion ($297 million) on its purchase of European beer brands from Anheuser-Busch InBev NV because the yen has strengthened since the firms cut the deal.
The brewer expects its purchase of Peroni, Grolsch and Meantime beers to cost about ¥300 billion, down from ¥330 billion estimated earlier, Managing Director Yoshihide Okuda said after Asahi announced results. It entered the deal for €2.55 billion ($2.9 billion) in April, conditional on AB InBev completing its purchase of SABMiller Plc.
Asahi was down 13 percent for the year through Wednesday, worse than the 7.7 percent drop in the Topix Foods Index.
Asahi is seeking overseas expansion to counter slumping beer consumption at home. The brewer of Super Dry reported a 28 percent drop in net income to ¥28.5 billion for the first half, better than the company had forecast, due to lower materials costs and strong domestic sales of non-alcoholic beverages like bottled tea and coffee.
"The improvement in the domestic beverage business is as expected," said Takashi Aoki, a fund manager at Mizuho Asset Management Co. in Tokyo. Profit is seen improving in the domestic beverage market as industry players have refrained from severe price competition, he said by telephone.
Still, Asahi expects the stronger currency to hurt sales repatriated from abroad, leaving its net income forecast for 2016 unchanged at ¥80 billion, less than the ¥84.1 billion average of 12 analyst estimates compiled by Bloomberg.
Asahi expects rising domestic sales, as well as internal actions such as cost-cuts, to help offset some of the fall in overseas contribution, Okuda said. Japan's largest brewer of beer cut its full-year sales forecast by 0.5 percent to ¥1.86 trillion, and raised its projection for operating profit by 2.7 percent to ¥140.7 billion.
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