After general and administrative expenses and other costs such as impairment and depreciation, the company made an operating loss of $20.2m, much worse than its $2.7m operating loss the year prior.<\/p>\n
DB Breweries made a 2025 net loss of $33.8m, more than double the $15.1m loss from the year prior.<\/p>\n
DB Breweries managing director Peter Hart described the result as “clearly disappointing”. Photo \/ Jason Dorday<\/p>\n
DB Breweries managing director Peter Hart said the result reflected a combination of challenging market conditions and business-specific factors that compounded over a relatively\u202fshort period.<\/p>\n
\u201cExternally, New Zealand has experienced a much slower recovery in beer and hospitality than many international markets, with softer consumer demand, which along with the loss of some export volume, saw our topline revenue decline by 10% year on year. <\/p>\n
\u201cAt the same time, operating costs across the sector have continued to rise,\u201d Hart said.<\/p>\n
\u201cAs both a brewer and hospitality operator, we are particularly exposed to these conditions. We are seeing pressure on beer consumption and on hospitality trading, meaning we are impacted from both sides of the market.\u201d<\/p>\n
Hart said factors converged internally over the year, including increased capital intensity from the business\u2019 acquisition of Star Hospitality.<\/p>\n
He was upfront about the challenges the sector is facing, but said hospitality remained an important part of how New Zealanders socialise and a critical route to market for its brands.<\/p>\n
Although the business couldn\u2019t control wider economic conditions, Hart said the hospitality arm was focused on improving operational performance, maintaining strong cost discipline and investing where it sees the best returns.<\/p>\n
Other factors that hampered the result included increased commercial investment in the company\u2019s brewery and financing costs.<\/p>\n
Hart also attributed the performance to excise costs, which recently increased after their annual review.<\/p>\n
Excise is now equivalent to roughly a third of the trade price of a typical beer keg before GST \u2013 standard beer rose to $38.999 per litre of alcohol on July 1. <\/p>\n
Together, Hart said these factors created significant pressure on profitability. <\/p>\n
\u201cClearly the result is disappointing and below the standard we expect from the business. That said, we understand the factors that have driven the performance and have a clear plan to address them.<\/p>\n
\u201cWe are treating 2025 as a line-in-the-sand moment and moving decisively.\u202fWe have a reinvigorated management team in place under a new managing director, who are focused on developing and implementing the required turnaround strategy for significantly improved performance. <\/p>\n
\u201cThe priority is to improve the effectiveness and financial return of commercial investment, with a more balanced approach to volume, revenue and profitability.\u201d<\/p>\n
Restatement and a ballooning loan<\/p>\n
The update also included the restatement of its 2024 result.<\/p>\n
Previous reporting on the result put DB Breweries\u2019 2024 total revenue at $594.4m with a profit of $4.9m.<\/p>\n
However, the brewer has since identified a customer-related intangible asset linked to Star Group had been overstated in the 2024 financial statements.<\/p>\n
Hart confirmed to the Herald that this arose after changes to a customer rewards system that affected the underlying data supporting the asset. <\/p>\n
The carrying value of the asset was reassessed and impaired, with the company reporting an impairment loss for 2024 of $51.4m.<\/p>\n
In addition, as part of its $56m deal in 2023 to acquire hospitality company K\u0101pura, a $21m performance contingent was included subject to meeting certain financial metrics.<\/p>\n
It was determined that the likelihood of meeting those relevant performance conditions associated with deferred consideration was lower than previously assessed, and the related liability should have been derecognised in 2024.<\/p>\n
As a result, the company has made several adjustments to its 2024 statement of income, including a gain on derecognition of deferred consideration of $21m.<\/p>\n
After accounting for the $51m impairment loss, the company\u2019s initial operating profit of $25.9m turned into a $2.7m operating loss.<\/p>\n
After finance expenses and income tax expense, the company\u2019s initial 2024 net profit of $4.9m worsened to a loss of $15.1m.<\/p>\n
DB Breweries announced a trial of New Zealand’s first zero-alcohol beer on draught at Auckland’s Empire Tavern earlier this year.<\/p>\n
Parent loan grows<\/p>\n
The company\u2019s financial statements also show DB Breweries\u2019 loan with its parent has now ballooned to $208m, increasing more than $70m since 2019.<\/p>\n
The loan was first identified in the company\u2019s 2016 financial statements, with a $116m loan from related party Heineken International BV, a subsidiary of Heineken International.<\/p>\n
A further $30m was added the following year in 2017, taking the total loan amount to $146m.<\/p>\n
That figure remained the same for four years before it was attributed to Heineken Asia Pacific, another Heineken subsidiary, in 2021.<\/p>\n
Then in DB Breweries\u2019 2023 financial statements, the company confirmed it had refinanced the loan with Heineken International BV for $198.5m, and utilised the funds to fully settle its loan with Heineken Asia Pacific and fund the acquisition of hospitality company K\u0101pura.<\/p>\n
Now in its 2025 result, DB Breweries has borrowed another $9.5m from Heineken International BV, as well as taking out a $5m loan from ANZ Bank, putting its total interest-bearing liabilities at $213m.<\/p>\n
The borrowings from Heineken International BV are subject to interest at 4.12% and are repayable on October 21 this year. The company\u2019s directors have indicated they intend to renew the loan.<\/p>\n
The loan from ANZ Bank is subject to interest at 3.68% and is repayable on August 27 this year.<\/p>\n
DB Breweries\u2019 largest competitor, Lion New Zealand, reported its 2025 financial results in June.<\/p>\n
It reported total revenue of $624.5m in the year to December 28, 2025, down 1.1%, while its net profit significantly improved, up from a loss of $27.7m in 2024 to a profit of $15.1m in 2025.<\/p>\n