China Resources Beer (0291) saw its first-half net profit fall 10.7 percent year-on-year to 5.17 billion yuan (HK$5.98 billion) and cut its interim dividend by 3.9 percent to 44.6 fen.
Overall turnover edged up 1.2 percent to 24.24 billion yuan, while basic earnings per share dropped to 1.59 yuan.
The core beer business stayed resilient with turnover rising 2.2 percent to 23.67 billion yuan as sales volume increased 1.7 percent to 6.6 million kilolitres.
A continuous premiumisation strategy drove its sales volumes for sub-premium and affordable premium beers up by over 10 percent and 15 percent, respectively. Among them, Heineken surged over 20 percent, while Lao Xue and Amstel jumped more than 40 percent and 80 percent.
However, the baijiu segment weighed on results as turnover plunged 27.2 percent to 570 million yuan and earnings before interest, taxes, depreciation, and amortization (EBITDA) shrank to 84 million yuan. The company attributed this short-term operational pressure to a cycle of profound adjustments and consumption polarisation in China's baijiu industry, characterized by "subdued overall volume, structural divergence, and high inventory levels".
To navigate the prolonged adjustment period, CR Beer plans to build a consumer digital operation system and expand its group-buying businesses and direct sales channels. They will continue to optimize the segment's structure, dedicating itself to turning baijiu into its second growth driver, the group added.
