AB Inbev-bound SABMiller earnings rise. EM growth outstrips currency swings.

By Thomas Buckley

(Bloomberg) — SABMiller Plc, the brewer that’s being bought by Anheuser-Busch InBev NV for $107 billion, reported a rise in first-half earnings on strong demand in Latin America and Africa.

Earnings before interest, taxes and amortization advanced 5 percent to $2.92 billion in the six months through September, the London-based maker of Grolsch and Peroni said in a statement. The measure excludes the effect of acquisitions and currency shifts. Profit rose by 11 percent in Africa, and 5 percent in Latin America.

SABMiller_Beers_September_2015

The profit margin was 23 percent, hurt by increased competition in Poland. SABMiller reported last month that lager volume in the first half was in line with the prior year. It said at the time that it is doubling the amount of planned cost reductions to $1.05 billion by 2020 as it seeks to match the profit margins of its suitor. AB InBev said Wednesday that it will achieve an additional $1.4 billion in annual savings through the combination of the world’s biggest brewers.

Read also: Done deal: AB InBev agrees record £68bn SABMiller deal

“We had a good first half, stripping out the effects of adverse exchange rates, with strong growth in Africa and Latin America and better mix across all of our regions,” Chief Executive Officer Alan Clark said in the statement. Currency swings depressed profit by $497 million, the company said.

AB InBev agreed on Wednesday to acquire SABMiller in the industry’s largest deal ever. Brewers of mass-market beer are consolidating to cut production and distribution costs as they lose market share to smaller independent brands in Europe and North America.

SABMiller rose 1.9 percent to 4,050 pence in London Wednesday, pushing its gain so far this year to about 20 percent.

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