Retail giant China Resources Enterprise posts Q2 loss, turns focus to beer

HONG KONG, Aug 21 (Reuters) - Retail conglomerate China Resources Enterprise Ltd (CRE) swung sharply to a loss in the second quarter as its retail and food divisions took blows from online competition and high operating costs in a slowing economy.

CRE had a loss of HK$3.96 billion ($510.88 million) in April-to-June compared with a profit of HK$573 million a year earlier, according to Reuters calculations based on six-month earnings data released on Friday. CRE posted a HK$363 million profit in the first quarter.

But all is not gloom for the owner of China's top beer brand "Snow". Profit from CRE's beer business jumped 30 percent to HK $544 million for the first half of 2015 from a year earlier. Chairman Chen Lang said CRE will strengthen its collaboration with joint venture partner SABMiller PLC (Xetra: BRW1.DE - news) .

In a filing to the Hong Kong stock exchange, Chen also said its independent shareholders had on Aug. 3 approved its sale of all its non-beer assets to controlling shareholder China Resources (Holdings) Co for HK$30 billion.

"We strongly believe our transformation into a beer-focused company is in the best interests of the shareholders and gives the group greater flexibility to execute its business plan for the beer business," Chairman Chen Lang said in a filing to the Hong Kong stock exchange.

The deal, part of an internal strategy and ownership shake-up, came two months after CRE posted its first annual loss in more than two decades, hurt by start-up costs for a venture with Tesco Plc (Xetra: 852647 - news) .

The proceeds from the disposal will be distributed to the shareholders by way of a special dividend of HK$12.30 per share to be paid by end of October.

CRE posted a HK$4.33 billion loss for the first half of 2015, compared with a HK$929 million profit a year earlier. ($1 = 7.7514 Hong Kong dollars) (Reporting by Donny Kwok; Editing by Ryan Woo)