SABMiller Sees No End To Tough Conditions As Profit Stagnates
SABMiller Plc, the world’s second-biggest brewer, said that it expects the business climate to remain challenging, as it reported stagnant full-year earnings.
Currency volatility will continue to take a toll, while raw-material costs are set to increase, the London-based beer-maker said in a statement. Pre-tax profit was little changed at $4.83 billion in the year ended 31 March.
The maker of Grolsch and Coors Light is cutting costs and expanding its soft-drink operations in Africa to counter a rising dollar and sluggish growth across the US and Europe. SABMiller, along with competitor Anheuser-Busch InBev NV, is also pushing lower-alcohol brews and other new products to capture drinkers who favour spirits or wine over beer.
Raw-material unit input costs are expected to increase by “low single digits in constant currency terms” this year, with some markets continuing to be impacted by foreign-exchange movements on imported raw materials, the company said.
SABMiller had already reported a 4-per-cent increase in so-called net-producer revenue, a measure that excludes excise taxes, thanks to gains in Africa, Latin America and a rebound in China. SABMiller gets more revenue from developing regions than other major brewers.
The company’s share-price gain for this year was trimmed to 4.2 per cent, as the stock fell 2.6 per cent to 3,502.5 pence.
Bloomberg News, edited by ESM