GLOBAL: Weak volumes dull SABMiller results - analysts
On-going problems with Foster's hurt SABMiller volumes in Asia-Pacific
Europe proved a rare bright spot in SABMiller's first-half results as volumes in key markets went limp, analysts have said.
The brewer and soft drinks maker notched up “headline meets” in today's (19 October) H1 results, according to a note from Nomura. However, despite Europe finding 9% volumes growth, Latin America and Asia-Pacific came in weaker than expected.
Latin America, which provides 32% of SABMiller profits from just 20% of volumes, posted a 4% volumes increase, one percentage point below Nomura's expectations, the analyst said.
Meanwhile, volumes growth in Asia-Pacific slowed to 3% as problems with SABMiller's Foster's unit continued to drag results. “The company is still losing market share in Australia and we would expect some negative operating leverage impact here,” Nomura said.
Analyst UBS also highlighted weaknesses in SABMiller's Latin America and Asia-Pacific volumes, and said overall group volumes in Q2 (up by 3%) were “disappointing” given a weak comparison from last year.
Also, “China (was) weaker than expected against very easy comps,” UBS said.
Nomura warned that, despite high volumes in Europe, the analyst is worried that margins are under pressure from discounts during the Euro 2012 football tournament co-hosted by Poland and Ukraine. Poland, which Nomura estimates makes up about half of SABMiller's European volumes together with Romania, saw lager volumes by increase 10% on the back of the event.
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