Australia-based food and beverage group Lion has reported a fall in annual sales from its combined dairy and drinks arm – but said growth from higher-margin products helped the unit’s underlying profitability rise.
The company, owned by Japan’s Kirin Holdings, said revenues and volumes from its Lion Dairy & Drinks division were down in the 12 months to 30 September, without disclosing specific figures.
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Lion pointed to its decision to leave the market for “everyday” cheese and the loss of some of its private-label milk contracts. In March 2015, Lion struck a deal to sell its everyday cheese business to Canadian dairy group Saputo.
The group said it had seen “a solid increase” in the underlying EBIT from Lion Dairy & Drinks, boosted by growth “in the higher-margin, milk-based beverages category”.
Lion said its “priority dairy categories” are “performing well”, in particular milk-based beverages and yoghurt. It cited, for example, the “12% growth year-on-year” from Dairy Farmers Thick & Creamy.
During the year, Lion said its yogurt business in south-east Asia had seen “30% growth”. The company claimed it was now “the number one yogurt manufacturer in Singapore and the number one imported yogurt manufacturer in Malaysia and Thailand”
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By GlobalDataIt added: “With this proven track record of achieving leadership positions in a short period of time together with its continued focus on driving investment to develop sustainable brand franchises, the business is well placed to achieve its growth plans for south-east Asia and meet the inevitable challenges of currency movement and regulatory issues expansion that the region may present.”
