The Trans-Tasman Tooheys brewer said Thursday that a five per cent price increase in New Zealand in June and a three per cent price hike in Australia on August 1 had the group on track to achieve between eight and 11 per cent profit growth for the 12 months to September 30.
Lion Nathan expects to book an after tax profit of $195-$200 million in the full-year despite weakness in its smaller Chinese operations and UK wines business.
"Total beer volumes for the group - excluding licensed XXXX volume in the UK - increased by seven per cent to 261 million litres for the (third) quarter," Lion Nathan said in statement.
While volumes were flat on a year to date basis, Lion Nathan said the pricing environment remained strong and noted a shift to higher margin brands.
Lion Nathan distributes Dutch beer Heineken and will shortly begin brewing the brand in Australia following a deal struck in May.
It also signed a 10-year deal in June to produce and market Beck's beer in Australia on behalf of Belgium-based Interbrew.
But while the Australia-New Zealand market remained growth-friendly, Lion Nathan's historically underperforming China operations continued to lag.
Cost pressures in the Yangtze River delta beer market nullified volume growth and could lead to a net loss in the second half of 2003/04.
Lion Nathan flagged in May that expected its China business to be swallowed by any one of the big six international brewers, including United States brewer Anheuser-Busch, Interbrew or Heineken.
Outgoing chief executive Gordon Cairns said he expected Chinese market to eventually consolidate down to two main players.
Commonwealth Securities retail analyst Craig Woolford said the sooner the better.
"I think the results they are seeing and the continued losses from that market just supports that view," he said.
Lion Nathan said wine shipments to the UK declined by 47,000 cases to 195,000, compared to first half figures, primarily as a result of its decision to reduce exposure to the cheaper unprofitable segments of the export market.
"Despite that volume decline, underlying profitability improved with better financial performances across all the Wine and Spirits Groups major operations," Lion Nathan said.