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Sapporo forecasting full-year loss due to additional tax

Kyodo

Sapporo Holdings Ltd. said Tuesday it will post a loss for the current year due to an extraordinary charge in the form of a higher tax imposed on one of the beer and beverage maker’s products.

Sapporo now expects a ¥2 billion group net loss for the year to Dec. 31 in what would be the first full-year loss for the holding company established in 2003.

The company forecast a ¥5 billion profit in February after posting a ¥9.45 billion profit last year.

Sapporo said the tax issue would have only a temporary effect on earnings, and kept unchanged its forecasts for an operating profit of ¥15 billion on sales of ¥537.7 billion.

The company released results for the January-June period on Tuesday, logging a group net loss of ¥10.93 billion, compared with ¥189 million in profit a year earlier, after booking a charge of ¥11.6 billion in additional taxes imposed by the National Tax Agency.

The first-half loss is the first for Sapporo in two years, even though sales increased 3.7 percent to ¥239.86 billion.

Sapporo said in June it had accepted the agency’s action in changing the tax treatment of Sapporo Goku Zero. Sapporo Breweries Ltd. launched Sapporo Goku Zero in June 2013 as a “third category beer,” subject to a lower tax rate. The agency determined that the product was ineligible for that classification.

Last month Sapporo released an updated version as “sparkling liquor” subject to a higher tax rate after modifying the production method.

“We remain a going concern. The special loss related to Goku Zero is only temporary,” Sapporo Holdings President Tsutomu Kamijo said at a news conference.