That would compare with NZ$126.6 million in the year to August, 1997, before a pre-tax abnormal restructuring charge of NZ$58.3 million.

Analysts said they expected familiar issues to come to the fore in Wednesday's announcement -- its performance in Australia versus the dominant player Fosters, progress in offloading its share in the loss-making Pepsi joint venture in Australia and its large investment in China.

The difference this time around is that Lion now has Kirin on its share register with 45 per cent of the stock after a lightning NZ$1.40 billion (NZ$5.40 per share), swoop in April.

Analysts said Kirin, despite having four representatives on the Lion board, had yet to show its hand as to which direction -- if at all -- it wanted Lion to take.

Some saidcashed-up Kirin appeared happy to be a passive investor in the high yielding Lion, while others said it might be biding its time until Lion's China assets start to bear fruit.

As it stands, the Chinese operations are expected to sink deeper into loss, with break even now pushed out to 2003.

Warren Doak at Merrill Lynch said there had been a positive shift in Lion's operational performance in Australia, where the bulk of its assets lie, and where Lion has battled to perform adequately for several years.

"Things have stabilised, and that's positive," he said.

In China, Lion had to deal with a competitive industry in a country facing an economic slowdown.

The Pepsi stake, which Lion wants to sell, was likely to break even or be slightly positive.

"But Lion Nathan's future in the short term is clearly its ability to grow market share in Australia," Doak said.

At home, Lion and its much smaller opposition, DB Group, have seen their market share drop, hurt by the impact of microbreweries andimports.

There was also the prospect of a law change enabling beer to be sold in supermarkets, which analysts saw as being a potential threat to margins.

Guy Hallwright at Credit Suisse First Boston said Australian earnings should improve by about 10 per cent but New Zealand earnings would be down on last year's.

"They should continue to move forward in most areas of the business. New Zealand is the only one that I'm a little bit concerned about and it's nothing to do with the way Lion is handling the market," he said.

"We are going to be seeing beer in supermarkets at some stage. Earnings in New Zealand will be under a bit of pressure over the next few years and the game for them will be to manage that, so that any profit decline is a reasonably small one."

Hallwright said earnings were historically strong in New Zealand, so they would be coming off a high base.

John Cairns at Cavill White Securities agreed Australia now appeared a better proposition.

"They seem to be getting the formula rightthere -- they are managing to improve their operating margin without a commensurate increase in market share, so they are obviously managing the brand portfolio much better."

But New Zealand, he said, remained the same old story.

"It's a mature market which is declining -- profit here is stagnant to under-pressure," he said.