Brewer Foster's announces drop in profits

Australian brewer Foster’s Group posted a nearly 9% drop in full-year profits today as Australian beer sales fell.

Net profit before one-off items fell 8.7% to 494.9 million Australian dollars (€360m) for the 12 months to June 30, the Melbourne-based company said in a statement.

Foster’s declared an annual net loss of 89 million Australian dollars.

The brewer also announced it would return 500 million Australian dollars to investors through a share buyback or capital reduction.

The move comes a week after Foster’s rejected a 10 billion dollar cash takeover offer from London-based rival SABMiller PLC, saying the bid significantly undervalues the company.

Australian beer sales were down 6% for the year, in part due to economic uncertainty and severe weather, including a cyclone and major flooding in the country’s north east earlier this year, the brewer said.

“Foster’s expects that the rate of decline in the Australian beer category will moderate in the first half of fiscal 2012,” the company said in a statement.

Foster’s declared a dividend of 13.25 cents per share.

The company’s shares were up 1.5% to 4.98 Australian dollars around noon today local time.