SABMiller raises a toast to sales lift in emerging markets

BREWING giant SABMiller - behind brands including Peroni, Miller Lite and Grolsch - saw beer sales recover during the summer aided by strong growth in emerging markets including Africa and Asia.

Double-digit gains in volume sales in countries including South Africa and China offset a weaker performance in Europe and North America and helped the London-based group meet forecasts for the six months to 30 September.

Overall lager volumes rose by 1 per cent with soft drinks volumes gaining 2 per cent during the first half of the financial year. Africa and Asia posted gains of 11 per cent and 10 per cent respectively.

In the United States, where the group formed the Miller-Coors joint venture in July 2008, lager sales fell 4 per cent in the second quarter due to economic uncertainty and high levels of unemployment. Europe suffered a fall of 5 per cent in the period.

Overall beer volume growth, price rises, some raw material cost cuts and the strengthening of currencies against the dollar helped SABMiller's results to meet its own expectations.

Analyst Matthew Webb at JP Morgan Cazenove said: "We see this statement as a small positive for SABMiller and retain our 'overweight' recommendation."

The company is the second largest brewer in the world after Anheuser-Busch InBev and its other brands include regional beers such as Castle and Tyskie. It also produces soft drinks for Coca-Cola in a number of markets.

Meanwhile, SAB has resumed reporting results from its 36 per cent stake in Delta Corp - the biggest brewer and soft drinks bottler in Zimbabwe.

The firm had stopped including Zimbabwe results in 2006 because of the country's deteriorating economy. It said it was now reporting them again due to the end of hyperinflation and the stabilisation of the Zimbabwean economy.

Mark Bowman, managing director of SABMiller Africa, said: "All credit goes to the Delta management team, whose efforts in keeping the business running in the last few years have been little short of heroic."

SAB, which earns over 80 per cent of its profits in emerging markets, is thought to be interested in expanding by buying the beer portfolio of Foster's Group or the African beer business of France's Castel.

Earlier this month, an industry report predicted that world beer consumption is expected to grow by between 1 and 1.5 per cent during 2010 after only marginal growth in 2009, with Asia and Africa the fastest expanding markets but Europe continuing to register falls in sales.

Shares in SABMiller, which reports interim results on 18 November, closed up 9.5p at 2,069p.