Lion Nathan on track for profit target

Brewer Lion Nathan Ltd expects to report an annual net profit of A$258 million ($318.16 million) for 2005/06, but has warned that higher commodity prices could adversely impact costs beyond this calendar year.

Lion Nathan today reported a 10 per cent increase in first half net profit to a record A$148.9 million.

Lion Nathan said the forecast A$258 million annual net profit this financial year excluded one-off items, as well as costs and benefits arising from its Project Invest and capital management programs.

"The annual earnings outlook for New Zealand remains flat in a continuing competitive environment," the company said.

"For Australia, the planned marketing investment in core beer brands will be higher in the second half than the first and the business will also begin investing behind dark spirit RTDs (ready to drinks)."

Beyond 2006, costs could be adversely impacted by the recent sharp spike in commodity prices, specifically aluminium and sugar, Lion Nathan said.