UK: SABMiller FY net profits fall, beer sales slow
SABMiller has reported a 7% slip in net profits for its fiscal full-year and is to reduce investment to reflect lower consumer demand for beer in the economic downturn.
Net profits slipped to US$1.88bn for the 12 months to the end of March, compared to US$2bn for the previous year, SABMiller said today (14 May).
Higher prices helped the UK-listed brewer to offset stalling beer sales by volume in several key emerging markets.
Net sales rose by 6% to $25.3bn, while like-for-like volume sales for the 12 months were flat against the year before, said SABMiller, which also today announced that it has acquiured all outstanding shares in its Polish subsidiary, Kompania Piwowarska.
Trevor Stirling, analyst with Sanford Bernstein, said that the results were "in-line with our estimates". SABMiller's share price remained broadly flat on the London Stock Exchange this morning, at just over GBP12.2.
SAB reported a tougher second six months, largely due to a "significant weakening" in major operating currencies against US$ and also a steeper slowdown in consumer demand.
EBITDA was flat against the prior year, at $4.1bn, although operating margin declined by 16% on higher input costs.
The firm said: "During the second half of the year, the group has re-evaluated spending in light of the changing consumer environment and is selectively maintaining investment behind its brands and operations to support future growth."
Beer volume sales were flat in Europe, as a tough year in Russia hampered growth in some other markets. Volumes fell 2% in South Africa and also dipped in the US, where the firm operates as a joint venture with Molson Coors.
Volumes in Latin America were up 1% for the year, as Peru and Ecuador offset slowdowns in Colombia and Central America. Africa, excluding South Africa, and India both saw volume growth of 5%, while China reported growth of 4% for the group.
Despite lower demand for beer in many markets around the world, a number of individual SABMiller brands saw growth. Pilsner Urquell volumes increased by 7% for the year, with Peroni Nastro Azzurro up 17%. Peroni rose by nearly 40% in the UK, albeit from a low base.
The brewer was cautious on its fiscal 2009/10. "Global economic conditions and consumer demand weakened during the year and there remains little visibility as to the timing of any recovery.
"In the current year we expect commodity cost pressures to continue, given existing contractual arrangements. In addition, the currency translation effect of the stronger US dollar will impact our reported results," the firm said, adding that it has "curtailed" investment but remains in a "strong financial position".
Molson Coors Brewing Co is to pay a quarterly dividend of US$0.24 per share....
Cobra Beer has developed a multi-media campaign to coincide with its sponsorship of National Curry Week....
Canada-based wine firm Andrew Peller has reported a drop in half-year profits, despite an increase in sales...
The top ten stories published on just-drinks this week:...
MillerCoors has said that the US beer market is heading for decline in 2009, but the brewer highlighted progress for its premium light portfolio....
Molson Coors, the Canada-based brewer, has reported double digit growth in net earnings in the third quarter of 2009....
Higher beer prices helped MillerCoors, the US brewing venture of SABMiller and Molson Coors, to increase net sales in the third quarter of 2009, with the group also reporting a double digit rise in pr...
Coca-Cola Amatil has said solid trading in the third quarter of its fiscal year means the soft drinks group is on-track to meet profits guidance....
- Why consumers don't care about vodka's provenance
- Pernod Ricard's FY Performance by Region, Brand
- Japan follows in Scotch whisky's footsteps
- Brown-Forman's Q1 Performance by Region, Brand
- Pernod Ricard's FY fiscal-2015 - Preview
- Diageo launches glass Bulleit & Cola bottles
- Pernod Ricard "in line" after full-year results
- Pernod Ricard releases social medial guide
- Bruno Mars rum rolls out across US
- Brown-Forman CEO unfazed by FX headwinds
- Global gin insights - market data, product innovation and consumer trends research
- Future growth opportunities for global spirits
- Global vodka insights - market forecasts, product innovation and consumer trends research
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research