Brewing giant SABMiller reported a 16 per cent decline in underlying annual pre-tax profit to $4.1 billion (£2.8bn) yesterday as the cost of its ongoing takeover by Anheuser-Busch InBev and charges linked to its African operations took their toll.
SABMiller, which has a public listing in London but is particularly strong in emerging markets, took a $573 million hit related to investments in Angola and South Sudan, and $160m in AB InBev merger costs.
The group, whose brands include Castle lager, said that revenues slid 10 per cent to $19.8bn as the firm suffered a “material negative impact” from adverse currency movements linked to the stronger US dollar in the 12 months to the end of March.
More positively, beverage sales by volume lifted 2 per cent. On a constant currency basis, SABMiller’s revenues rose 5 per cent, benefiting from a stronger trading backdrop in Africa and Latin America.
In Latin America, the group sold 5 per cent more drinks by volume, bringing the region’s contribution closer to a quarter of total revenues.
Despite the setback in profits and revenues, SAB chief executive Alan Clark said: “These are good results. We grew (underlying earnings) across all regions and our group (profit) margin improved through the year, on an underlying basis.
“This performance reflects our focus on driving superior growth by strengthening our core brands, expanding the beer category to reach more consumers on more occasions and placing an emphasis on premiumisation in all regions.”
The group said lager sales volumes increased 1 per cent in the year while soft drink sales were up 6 per cent. SAB said that total volume growth was tempered by weakness in China and the United States.
Meanwhile, Miller Brands UK, the UK and Ireland subsidiary of SABMiller, revealed that its three main upmarket brands – Peroni, Pilsner Urquell and Kozel – all saw double-digit volume growth during the financial year.
SAB said its takeover by AB InBev to become the world’s biggest brewer, with 30 per cent of the market, was on course to close in the second half of this year, but not before its final dividend of 93.75 cents becomes payable to shareholders on 12 August.
It comes as SAB is offloading several assets – including Peroni, Grolsch and Meantime – to meet regulatory demands ahead of the bumper £71bn marriage with AB InBev.