The international brewing group, SABMiller, has reported pre-tax profits for the year to the end of March, 2003 of US$770m, up 27% from the previous year. However, the performance from Miller, the US brewer which SAB acquired last July for US$5.6 billion, was below expectations.

Group turnover rose from US$3.72 billion to US$8.30 billion, while group operating profit was up from US$619m to US$803m. Turnover, including share of associates, rose by 109% to US$9.11 billion, with organic growth running at 17.8%. EBITA increased by 66% to US$1.27 billion, driven by “continued focus on volume growth, productivity and cost containment”.

Total group beverage volumes rose by 52% to 151.4m hectolitres from 99.4m hls last year with organic growth of 3%. “Our widespread portfolio of businesses delivered an impressive financial performance over the year,” the company said.

However, CEO, Graham Mackay, said Miller’s volumes had fallen by 3.7% in the nine months since July, with volumes in the US down by 4.5%. But international volumes had risen by 6.6%, Graham said, adding that it would take three years to turn the US brewer around. SABMiller’s shares in London fell by 3.2% on the news.

“In the last nine months, Miller’s market share losses have accelerated, but we expect with the changes we are making to see real progress within two to three years,” Mackay said.

Analysts have been concerned about the possible delay in turning Miller round. Nigel Davis, analyst at JP Morgan, downgraded SABMiller shares from “overweight” to “neutral” and cut his earnings forecast for the company for the coming year by 7%. “Our expectation had been for a demonstrable improvement in Miller’s fortunes within 18 months. This however looks ambitious based on management’s comments,” Davis said.

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SABMiller announced last week that it was acquiring a majority stake in the Italian brewer, Peroni, and earlier this week announced the formation of a joint venture between its Indian subsidiary and the Indian brewing group, Shaw Wallace.

The brewer has proposed a final dividend of 18.5 cents a share, with an unchanged full-year payout of US$0.25 a share.

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