China Resources Enterprise, the country’s largest brewer and partner of SABMiller, turned to a first-half loss after a goodwill impairment on its discontinued retail venture with Tesco.
The company will book an underlying loss of HK$4.41 billion ($569 million), compared with a HK$668m profit a year earlier, it said in a statement Friday. The underlying figure excludes asset revaluation and major disposals. Sales rose 13 per cent to HK$94.7 billion.
The Hong Kong-based company, which also runs hypermarkets and supermarkets, earlier this year said its state-owned parent offered to buy its assets including the loss-making retail arm that’s been hurt by China’s economic slowdown and austerity measures. The move is to allow the listed company to focus on its beer unit.
The company’s discontinued operation “was still affected by the slowdown in economic growth, integration, as well as ongoing investment for business transition and nationwide expansion,” China Resources said in the statement, adding the segment posted a HK$4.9 billion net loss.
The retail division made a provision for goodwill impairment of HK$2 billion as its “faced with challenges and an uncertain short-term outlook,” the company added.
Bloomberg News, edited by ESM
