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UK: SABMiller volumes drive first half earnings growth

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SABMiller said today that "satisfactory growth" had helped deliver a 3% rise in basic earnings per share to 52.9 US cents in its first half of the year. The growth was on the back of a strong performance in the comparable period last year.

Graham Mackay, chief executive said: "This good start to the year is a further demonstration of the advantage we enjoy in our access to growth markets and our ability to offer our customers and consumers comprehensive and varied portfolios of unique beer brands.

"The combination of strong volume growth together with good earnings contributions from around the group supports our confidence for the future."

Driving the results was organic growth in overall lager volumes of 9% to 117m hectolitres. Total beverage volumes were up 9% on an organic basis, and 30% above last year on a reported basis at 144m hl, which includes the first full contribution from the Bavaria business in South America.

Reported EBITA of US$1.78bn was up 41% and included the first full half year contribution from South America. On an organic, constant currency basis, EBITA increased by 13% reflecting strong operating performances including improved pricing and mix, in most key markets, the company said.

Profit before tax leapt 22% to US$1.37bn from US$1.12bn in the same period last year.

The company said it had seen particularly strong lager volume growth in Europe, with market share gains in a number of countries buoyed by the World Cup, and in China where its associate, CR Snow, became the country's largest brewer by sales volume in the first half of calendar 2006, and its national brand 'Snow' moved into the top ten beer brands by volume worldwide.

In North America, however, Miller Brewing Company continued to be impacted by competitive pricing conditions and significant increases in commodity and energy prices.

The company noted that its integration activities in South America are proceeding well, with volume growth across the four countries running ahead of initial expectations. SABMiller said it will accelerate its capital investment programme in the region.

"The current growth rates in South America give us further confidence in the long-term potential of this business," a statement said. The strong volume growth, combined with price and mix benefits, resulted in the good increase in EBITA, SABMiller added.

In Europe, the group enjoyed mix gains across much of the division. From Africa & Asia, it saw price improvements in both Angola and Mozambique, and from South Africa the company continued to benefit from the consumer shift to premium products.

Looking forward, SABMiller said: "The group delivered satisfactory growth in the half year, enhanced by our new businesses in South America. Our global footprint; our brands and our brand portfolios; and our ability to continue to leverage our global scale and to improve productivity, give us confidence that we will continue to make progress."


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