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Beer helps Foster's first-half net
SYDNEY, Australia (CNN) -- Australian brewing giant Foster's Group has lifted first-half net profit by 4.1 percent to A$335.3 million ($198 million) on better margins in its beer business. The result was slightly below analysts' expectations of about A$340 million, sending Foster's shares down 0.68 percent to A$4.37 by the close of Australian trading Tuesday. The broader market, measured by the S&P/ASX200, was down 0.39 percent to 2,879.0. Foster's, which now gets 40 percent of its revenue from wine, said margins in its global wine trade division were maintained. It said it would likely deliver "steady growth" this year in the face of strong competition. Common themeFoster's CEO Ted Kunkel said this stiff competition was a common theme in all its markets, but the core beer and wine businesses had performed very well. Net sales rose 6.1 percent to A$2.5 billion, with wine volumes showing a 12.6 percent increase. Markets in the United States, Europe and Asia all showed volume growth. New premium beer brands boosted margins in the beer division. The Foster's result comes after a shakeup last week at rival wine group Southcorp, where CEO Keith Lambert was forced out on February 3 after an earnings shock two weeks earlier. (Full story) Slashed forecastSouthcorp, whose lineup includes such premium Australian brands as Penfolds, Rosemount and Lindemans, stunned the market on January 21 when it cut its earnings guidance for the year to next June by 14 percent. It said it now expects earnings before interest, tax and amortization of A$287.1 million ($168 million), down from an October estimate of A$335 million. Foster's has brewing operations in Australia, Vietnam, India, China and the Pacific, under key beer brands such as Foster's Lager, Victoria Bitter and Crown Lager. It also recently bought a 40 percent equity interest in a major alcoholic beverages sales, marketing and distribution business in the Gulf region. Its international wine division, Beringer Blass Wine, has operations in the United States, the United Kingdom, Europe and South America, as well as in Australia and New Zealand. Foster's spent $1.6 billion to buy the well-known U.S. company Beringer Wines in 2000, and has made numerous smaller wine acquisitions since then in New Zealand, Australia and the U.S.
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