SABMiller H1 Earnings Rise, Confident on Future

Posted 09 November 2006 @ 09:19 am EET     Print     Reprint     E-Mail     Comments

LONDON (Reuters) - Brewing giant SABMiller Plc (SAB.L) reported a 7-percent rise in half-year earnings on Thursday, in line with expectations, and added it was confident of future progress at the group.

The world's second-largest brewer and maker of Miller Lite, Castle and Peroni (SABJ.J) beers posted adjusted earnings per share of 56.6 U.S. cents for the half-year to Sept 30. compared with analyst forecasts of 53.8 to 58.1 cents.

"The combination of strong volume growth together with good earnings contributions from around the group supports our confidence for the future," Chief Executive Graham Mackay said in a results statement.

The brewer confirmed its underlying beer volumes rose 9 percent in the half-year as it posted strong growth in Europe and Asia/Africa but suffered a slowdown in its biggest market, South Africa, and continued volume declines at Miller.

The brewer, which bought Colombia's Bavaria for $7.8 billion in October 2005, said its South American beer volume growth exceeded its expectations, while it saw "excellent" beer volume growth in China and India.

However, Miller reported a 12-percent plus fall in earnings after suffering price cuts from competitors, market share gains by imported and craft beers and a significant rise in commodity costs such as higher aluminum can prices. Miller accounts for around 14 percent of group profits.

The London-based group also reported half-year earnings before interest, tax and amortization (EBITA) rose 41 percent to $1.781 billion, and proposed a half-year dividend up 8 percent at 14 U.S. cents a share.

SABMiller makes over a third of its earnings in rand from beer and soft drinks, and the South African currency has depreciated sharply against the dollar so far this year to put pressure on its reported earnings in dollars.

SABMiller shares have underperformed both the blue chip FTSE 100 Index and the DJ Stoxx European food and beverage index by around 11 percent so far this year. The stock closed on Wednesday at 10.57 pounds.