SABMiller profits increase

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SABMiller Newscast/SABMiller PLC Credit: One Red Eye/Philip Meech.

Global brewing giant SABMiller (SAB) has reported a 14% rise in its adjusted earnings per share to US 118.1 cents for the six months ended September 2012 from 103.3 cents a year ago.

In SA currency terms‚ EPS rose 32% to 967.5 cents per share from 731.1 cents.

The group declared an interim dividend of 24 US cents‚ up 12% from a year ago’s 21.5 cents.

Group revenue grew 11% to US$17.476 billion.

Executive chairman Graham Mackay said broad-based revenue and profit growth in the first half reflects the continued success of the group’s approach to the development of its brands‚ product portfolios‚ distribution and sales effectiveness.

“We have strengthened our local flagship brands‚ complemented by product innovation across a wide range of styles and prices. Margins have risen modestly despite higher input costs‚ as a result of our cost reduction and procurement initiatives supplemented by a positive contribution from the acquisitions and business combinations concluded in the second half of last year‚” he said.

The group delivered strong revenue and profit growth during the period‚ with underlying volumes‚ aggregate pricing and mix all trending positively and contributing to margin development.

“We grew volumes and revenues across most regions despite a moderation of growth in some emerging markets. Development of brands‚ product ranges and the route to market continued across the breadth of our portfolio supported by further improved operating processes. The acquisition of Foster's in particular has contributed significantly‚” SABMiller said.

Total beverage volumes were 4% ahead of the prior period on an organic basis with lager volumes up 4%‚ soft drinks volumes up 6% and other alcoholic beverages up 12%.

This volume growth‚ selective price increases and improved brand mix in most regions led to group revenue growth of 8% on an organic‚ constant currency basis‚ with group revenue per hl up 3% on the same basis. Reported group revenue‚ which includes business combinations‚ was up 11%.

Currency movements had an adverse impact of six percentage points on group revenue growth principally due to the weakening of the South African rand and Central European currencies.

EBITA of US$3.17 billion represented growth of 17%‚ including the contribution of Foster's and other business combinations but also the impact of currency weakness.

EBITA grew by 9% on an organic‚ constant currency basis reflecting a combination of volume growth and rising group revenue per hl combined with some cost savings and efficiencies.

On an organic‚ constant currency basis the EBITA margin rose 30 basis points (bps).

Raw material input costs rose‚ as expected‚ by mid-single digits (on a constant currency‚ per hl basis) largely as a result of higher cereal costs partly offset by procurement and other savings‚ the group noted.

Looking ahead‚ the group said it has recently seen moderation of economic growth in some countries‚ but the potential of the principal emerging markets in which it operates remains strong.

“The positive impact from acquisitions and business combinations seen in the first half will reduce as we cycle their completion in the latter part of the year‚” it said.

“We expect input cost pressures to continue at a level similar to that of the first half of the year‚ and we will selectively raise prices where market conditions permit. We will continue to invest‚ in brand development‚ innovation‚ systems and capability to sustain growth‚ as well as to implement our planned capital programmes‚” it concluded.

Johannesburg-listed shares of SABMiller rise more than 2 percent after the global brewer posts a jump in first half profit and raises interim dividend by 12 percent to 24 cents.

The shares are trading 2.33 percent higher at 382.78 rand. - I-Net Bridge and Reuters


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