Falling volumes in India and the US failed to stem SABMillers "in line" expectations for Q1

Falling volumes in India and the US failed to stem SABMiller's "in line" expectations for Q1

SABMiller has said that its first fiscal quarter financial performance is "in line" with its expectations, despite volumes in both India and the US coming in below a year earlier.

In a trading update issued earlier today (21 July), the UK-based global brewer said that group sales in the three months to the end of June have come in 7% up year-on-year, on an organic, constant currency basis. Both lager and soft drinks volumes in the period delivered increases of 5% each, with SAB noting growth in consumer spending in many developing markets, and a relatively weak comparative quarter a year earlier.

The brewer's performance in Colombia would finally appear to have normalised, after a tough few months. Following an increase in VAT in the country in February last year, SAB's Grupo Empresarial Bavaria unit saw sales drag. But, lager volumes in Latin America in the latest quarter rose in the latest quarter by 6%, thanks to fewer election "dry days" in Colombia and the normalisation of weather patterns in the country last month. Peru also performed well, with volumes climbing by 11%.

Lager volumes in Europe were up by 5%, driven by an 11% jump in Russia as the company cycled weak comparatives. In the US, however, the MillerCoors JV saw sales to retailers (STRs) dip by 2.7% as a result of "a continued weak economic environment, ongoing high unemployment levels and subdued consumer spending affected by high fuel prices and poor weather".

Africa delivered growth of 15%, with Tanzania (+23%), Uganda (+28%) and Zambia (+29%) highlighted as the star performers. Asia saw volumes rise by 11%, led by a 14% increase in China.  Indian volumes struggled, however, down 13% on the prior year as SAB continued to be impacted by trading restrictions introduced in July last year in Andhra Pradesh. Excise increases implemented at the start of the quarter also limited overall market growth in a number of key states.

Finally, South African lager volumes were flat, while soft drinks volumes dipped by 3%. Both beer and soft drinks volumes were affected by the cycling of the 2010 FIFA World Cup, unseasonably cold and wet weather and subdued consumer demand, SAB said.

SABMiller will release its Q2 trading statement on 20 October, with full interim results following on 17 November.

To read the full statement, click here.