SABMiller posts 1% earnings rise, sees tough trading ahead

SABMiller plc, one of the world's leading brewers, reported its preliminary results for the twelve months to 31 March 2014 today. SABMiller currently holds an extraordinary market cap of R956.7 billion, coupled with a PE ratio of 29.8, and a dividend yield 1.75%. The group's share price is trading up 15.2% on the year and has seen steady rise in recent years.

Highlights

• Portfolio development and commercial execution drive group net producer revenue (NPR)
• Reported group NPR decline of 1% with organic, constant currency group NPR growth of 3%
• Lager volumes up 1% on both reported and organic bases with growth in Latin America, Africa and Asia Pacific partially offset by declines in Europe and North America
• Reported EBITA growth of 1% and EBITA margin improvement of 50 basis points (bps) to 24.2%, with organic, constant currency EBITA growth of 7% and EBITA margin expansion of 90 bps
• The depreciation of key currencies against the US dollar had a significant negative impact on the translation of financial results, impacting reported EBITA by approximately US$400 million
• Adjusted earnings up 2%, with adjusted EPS also up 2% to 242.0 US cents per share
• Full year dividends per share up 4% to 105.0 US cents

LONDON (Reuters) – SABMiller reported a 1 percent rise in full-year earnings on Thursday, hurt by foreign exchange rates, and forecast another year of tough trading.

As the maker of Peroni and Miller Lite beers grapples with slower growth in mature markets and volatile trading in some emerging markets, it is working hard to cut costs.

It announced a new cost-cutting programme, aimed at saving $500 million a year by fiscal 2018. That is on the back of another programme it just completed that shaved nearly the same amount.

In the fiscal year to 31 March, SABMiller narrowly surpassed analysts' expectations by reporting earnings before interest, tax, and amortisation that rose 1 percent to $6.45 billion and net revenue that fell 1 percent to $26.72 billion.

Analysts on average were expecting EBITA of $6.41 billion and revenue of $26.93 billion, according to a consensus supplied by the company.

The depreciation of currencies including the Australian dollar, South African rand, Turkish lira and Colombian peso reduced EBITA by about $400 million, the company said.

SABMiller already reported full-year sales volume growth of 2 percent, with lager volume up 1 percent and soft drink volume up 5 percent.

The company said it expects trading conditions to remain broadly unchanged, with growth driven by developing markets though impacted by currency movements.

The company also expects to continue to raise prices on some products as raw material costs are expected to rise at a low single-digit rate.

For the full report, Click Here