Europe and US weigh on SAB Miller profits

City A.M. Reporter
LONDON-BASED brewer SABMiller narrowly missed forecasts yesterday with an 11 per cent rise in half-year earnings, helped by strong emerging markets, which made up 80 per cent of company profits.

But earnings fell in North America and Europe with flat volumes in the former and a sales decline in the latter.

Group revenue rose 10 per cent to $15.7bn (£9.9bn) in the half-year and operating profit was up 10 per cent to $2.7bn, while underlying beer volumes rose three per cent. The company posted adjusted earnings per share of 103.3 cents for its half-year to the end of September, below the forecast of 103.9 cents.

The world’s second-biggest brewer, SABMiller said it would raise its half-year dividend 10 per cent to 21.5 cents.

Chief executive Graham Mackay said consumer confidence is hitting beer drinking in Europe and US, where consumers are facing high unemployment and poor economic growth prospects.

He did see favourable conditions in Latin America and Africa where he announced a $555m investment in four African nations and Peru.

“We are cautious about SAB because we worry about margins in 2012-2013, driven by rising input costs, weak volumes in Europe, North America and South Africa and a highly competitive price situation in Europe,” said analyst Adam Spielman at Citi.