SABMiller 1st Half EPS +6%; Sees Tough Conditions Continuing
19.11.09, 09:42 Uhr |
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LONDON -(Dow Jones)- Brewer SABMiller PLC (SAB.LN) Thursday posted a 6% rise in adjusted first-half earnings and said that while tough trading conditions will continue in the second half of the year it should benefit from easing currency and cost pressures.
The London-based company--which counts Grolsch, Peroni Nastro Azzurro, Castle Lager and Pilsner Urquell among its brands--said earnings per share before exceptional items in the six months to Sept. 30 rose 6% to 80 cents, up from 75.2 cents a year ago, and ahead of expectations.
Revenue fell to $8.85 billion from $11.17 billion, while net profit dropped to $973 million from $1.42 billion.
Profit was hit by higher input costs and worse foreign-exchange rates. Analysts are expecting a much better profit performance in the second half of the year as input cost pressures and currency trends reverse.
"The weakness of our major operating currencies against the U.S. dollar has affected reported results, but we have continued to generate a strong underlying performance," said Chief Executive Graham Mackay.
While it reports results in dollars, a significant proportion of SABMiller's earnings come from emerging economies, which have seen their currencies weaken in the fiscal first half.
"Overall, we expect the current trading conditions to continue in the second half, as unemployment, retail spending and other consumer indicators lag the reported stabilization of GDP in many of our markets."
The world's second-biggest brewer by volume after Anheuser-Busch Inbev NV (ABI.BT) said its input costs--which have been sharply higher in the past year--will begin to ease toward the end of this year as its existing contracts unwind, allowing it to take advantage of lower prices.
While volumes declined 1% in the half year, the company managed to grow its market share in many markets despite significant price increases. Price rises, together with cost savings, resulted in a 1.1 percentage point growth in operating margin during the period.
The company said price rises will moderate in the coming months compared with last year.
SAB's shares have risen more than 40% since the start of the year as the company's strength in emerging markets is seen as an investment opportunity. They closed Wednesday at 1657 pence.
SABMiller is seen as a front-runner ahead of Heineken NV (HEIA.AE) to buy Mexico's second-largest brewer Femsa Cerveza (FMX).
Femsa recently acknowledged it was contemplating selling its beer business or making a strategic alliance with one of the world's brewing giants.
Revenue fell to $8.85 billion from $11.17 billion, while net profit dropped to $973 million from $1.42 billion.
Profit was hit by higher input costs and worse foreign-exchange rates. Analysts are expecting a much better profit performance in the second half of the year as input cost pressures and currency trends reverse.
"The weakness of our major operating currencies against the U.S. dollar has affected reported results, but we have continued to generate a strong underlying performance," said Chief Executive Graham Mackay.
While it reports results in dollars, a significant proportion of SABMiller's earnings come from emerging economies, which have seen their currencies weaken in the fiscal first half.
"Overall, we expect the current trading conditions to continue in the second half, as unemployment, retail spending and other consumer indicators lag the reported stabilization of GDP in many of our markets."
The world's second-biggest brewer by volume after Anheuser-Busch Inbev NV (ABI.BT) said its input costs--which have been sharply higher in the past year--will begin to ease toward the end of this year as its existing contracts unwind, allowing it to take advantage of lower prices.
While volumes declined 1% in the half year, the company managed to grow its market share in many markets despite significant price increases. Price rises, together with cost savings, resulted in a 1.1 percentage point growth in operating margin during the period.
The company said price rises will moderate in the coming months compared with last year.
SAB's shares have risen more than 40% since the start of the year as the company's strength in emerging markets is seen as an investment opportunity. They closed Wednesday at 1657 pence.
SABMiller is seen as a front-runner ahead of Heineken NV (HEIA.AE) to buy Mexico's second-largest brewer Femsa Cerveza (FMX).
Femsa recently acknowledged it was contemplating selling its beer business or making a strategic alliance with one of the world's brewing giants.
DJG/isj
