August 21, 2017 / 5:34 AM / a year ago

UPDATE 1 - China Resources Beer H1 profit up 93.4 pct, lags forecast

(Add details, management comment)

* Says beer sales volume rises 2.9 pct in H1

* Average selling price up 0.8 pct

* Says to increase mid- to high-end beer products to meet demand

HONG KONG, Aug 21 (Reuters) - China Resources Beer (Holdings) Co Ltd on Monday posted a 93.4 percent rise in first-half net profit thanks to higher average selling prices and improving sales due to warmer weather.

The solid performance reaffirmed that Chinese breweries are on the road to recovery following stagnated beer consumption in recent years.

“Though we have come across short-term challenges brought by the cost pressures, the group believes that it can continue to make steady progress and become a trusted and beloved beer enterprise,” Chairman Chen Lang said in a statement.

The owner of Chinese beer brand Snow posted a profit of 1.17 billion yuan ($175.4 million), slightly lagging forecasts of 1.25 billion yuan by Thomson Reuters SmartEstimate. It reported a restated 605 million yuan profit for the same period a year ago.

Revenue increased 3.7 percent to 15.77 billion yuan, from 15.21 billion yuan in the year-ago period.

Beer sales volume increased 2.9 percent year-on-year to 6.31 million kilolitres amid favorable weather conditions. Average selling prices increased 0.8 percent.

The Chinese brewer, which completed its purchase of a 49 percent stake it did not already own in China Resources Snow Breweries last October, said it would increase mid- to high-end beer products to meet demand for high-quality drinks.

The bigger rival of Tsingtao Brewery said earlier this year that uncertainties in the economic outlook would remain amid changes in political and economic policies in some key regions.

Shares of China Resources Beer slid 2.2 percent after the results, lagging a 0.5 percent gain in the benchmark index . (Reporting by Donny Kwok; Editing by Anne Marie Roantree and Biju Dwarakanath)

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