SHANGHAI, Aug 30 (Reuters) - Tsingtao Brewery Co , China’s second largest beer maker, said on Wednesday first-half profit rose 7.4 percent as it controlled costs and took measures to prevent excess production.
Net profit for the first six months of the year came in at 1.15 billion yuan ($174.45 million), while revenue rose 2.1 percent from a year ago to 15.1 billion yuan, the brewer from China’s eastern port city of Qingdao said in a filing on the Hong Kong stock exchange.
China is the world’s largest beer market by sales, but profits have been harder to come by amid fierce competition between local brewers and global beer giants AB InBev, Heineken NV and Carlsberg.
Rising costs of raw materials, logistics and labour have also continued to pressure the bottom lines of domestic brewers, Tsingtao said.
Domestic and international brewers have looked to expand their offerings of pricier beers and craft ales in the country to fatten their margins.
Tsingtao’s larger local rival China Resources Beer Co Ltd said this month first-half net profit almost doubled - albeit from a fairly low base - thanks to higher average selling prices and improving sales due to warmer weather.
The first-half announcement from Tsingtao, which derives almost all of its revenues from China, Hong Kong and Macau, showed a continued recovery in the brewer’s fortunes.
Tsingtao’s net profit climbed 8.5 percent in the first quarter after the firm posted its biggest loss in two decades last year amid rising costs, weak consumption and tough competition.
The brewer’s shares have risen 10 percent this year, but have lagged the broader CSI300 Index of China-listed firms, which has climbed around 16 percent over the same period.
$1 = 6.5920 Chinese yuan renminbi Reporting by Adam Jourdan and Lee Chyen Yee; Editing by Mark Potter