Tsingtao Brewery says 1st-qtr profit rises

HONG KONG, April 30 (Reuters) - Tsingtao Brewery Co Ltd (0168.HK), China's No. 2 beer maker, posted an increase in first-quarter earnings late Tuesday, despite soaring barley costs and higher taxes that ate into sales growth.

Tsingtao (600600.SS), 27 percent owned by top U.S. beer maker Anheuser-Busch Cos Inc (BUD.N), is fighting Carlsberg (CARLb.CO), Heineken (HEIN.AS), and China Resources Enterprise Ltd (0291.HK), for a slice of the world's largest beer market by volume.

Global barley prices rose 13 percent quarter-over-quarter, according to ABN AMRO. The bank predicted Tsingtao's average barley price will increase 50 percent this year.

The brewer said it earned 129.64 million yuan ($18.56 million) for the first quarter, according to Chinese accounting standards.

It gave no comparison figures, but said the net profit for the same period a year ago had been adjusted for an income tax rate applicable for 2007 to 33 percent from 15 percent, resulting in a sharp rise in profit for the first quarter of 2008.

Tsingtao's shares slid more than 12 percent during the quarter, beating a 25 percent loss in the index of Chinese companies listed in Hong Kong .HSCE.

Anheuser said it expects 2008 income from its equity stakes in Tsingtao and other foreign brewers to decline. The gloomy outlook follows a 21 percent drop in foreign-equity income, which contributed to lower first-quarter profit for the U.S. brewer. (US$1=HK$7.8=6.984 yuan) (Reporting by Joseph Chaney; editing by Jeffrey Benkoe)