SABMiller eyes tougher time in Europe, US
Fin24 - Nov 18th 2011, 08:01
London - Brewer SABMiller [JSE:SAB] narrowly missed forecasts with an 11% rise in half-year earnings on Thursday, and warned that trading in Europe and North America will stay tough as its input costs tick higher.
The world’s No 2 brewer and maker of Miller Lite, Peroni and Grolsch earns over 80% of its profit from fast-growing emerging markets, and these expanding markets helped offset declining North American and European profits.
The London-based company reported adjusted earnings per share of 103.3 US cents for its half-year through September, below the forecast 103.9c from a company-compiled consensus and a ThomsonReuters I/B/E/S forecast of 103.5c.
Its half-year dividend was raised 10% to 21.5c.
“Economic and market environments in the USA and Europe are expected to remain difficult with generally favourable conditions elsewhere, particularly in Latin America and Africa,” CEO Graham Mackay said in a statement.
He added that raw material costs were expected to rise at a slightly faster rate in its second half and into the next year, but the group continued to expect the rise in its year to March 2012 to be in low single digits.
The brewer has been active on the deal front, agreeing to buy Australia’s Foster’s in September for $10.2bn, while the following month it swapped its Russian and Ukrainian business for a 24% stake in Turkish brewer Anadolu Efes.
Group revenue rose 10% to $15.7bn in the half year and operating profit or Ebita was up 10% to $2.7bn, while underlying beer volumes rose 3%.
Other brewers have seen mixed fortunes, with world No 1 Anheuser-Busch InBev gaining from a buoyant Brazil, while Europe-focused Heineken and Carlsberg have suffered from tough trading.
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