orld’s second-biggest brewer, reported first-quarter revenue growth that beat estimates as it sold more expensive beer in Africa and Europe, offsetting lager volume declines in Latin America and Australia.Revenue advanced 6 per cent in the three months through June, the London-based maker of Grolsch and Peroni said in a statement today. Analysts expected 4.6 per cent growth, according to the median of 13 estimates compiled by Bloomberg News. The volume of beer sold rose 1 per cent, compared with a 2.7 per cent median estimate. Both measures exclude the effects of acquisitions, disposals and currency fluctuations.
“Strong growth in Africa, South Africa and Europe was balanced by slower momentum in North America,” Chief Executive Officer Alan Clarke said in the statement, citing “innovations and improved trade execution” for helping increase revenue growth.
SABMiller, the brewer founded more than a century ago in South Africa, has the largest exposure to emerging markets of the major beermakers, which has helped it offset tough conditions in the US, where its MillerCoors LLC joint venture operates, and Europe over the last few years. The results compare with the fourth quarter’s 1 per cent lager volume growth and 2 per cent revenue growth.
Shares Rise
The company had said when it reported results in May that it saw little change in business conditions this year and would focus on creating innovative products and packaging to capture growth in regions including Africa and Latin America.
SABMiller’s shares rose 1.2 per cent to 3,405 pence as of 8:01 a.m. in London. The shares have risen 9.5 per cent this year.
“This is certainly a better update than we and the market anticipated, especially in relation to Africa and South Africa,” wrote Phil Carroll, an analyst at Shore Capital in Liverpool, England, in a note.
Sales rose 11 per cent in Africa aided by soft drinks and added capacity in Nigeria, and 12 per cent in South Africa, helped by growth in more expensive beers including Castle Lite. Revenue increased 8 per cent in Europe, following a poor performance in the same period a year ago and aided by Easter.
Lager volumes, however, declined in Latin America, the company’s largest region, and Australia, where it bought Foster’s Group Ltd in 2011 for about A$10.5 billion.
Lager sales in Colombia plunged 6 per cent after SABMiller raised prices and the company restricted alcohol sales during two rounds of presidential elections, while volume fell 3 per cent and revenue 6 per cent in Australia due to negative consumer sentiment, SABMiller said. North American revenue rose 3 per cent as sales to wholesalers slid 1.7 per cent as growth in Redd’s offset declines in Miller Lite and Coors Light.
SABMiller said July 18 it sold its stake in South African hotelier Tsogo Sun Holdings Ltd and will reinvest the proceeds in its beverages business. The company said today it expects a share buyback by Tsogo that formed part of the deal will be completed Sept. 5, at which point SABMiller will no longer have a stake.
