SABMiller’s Third-Quarter performance boosted by Africa, Latin America

Brewing giant, SABMiller, reported a higher than expected third-quarter revenue at constant currencies as its businesses in Africa and Latin America turned in strong performances.

The world’s second-largest brewer by sales after Anheuser-Busch InBev said net producer revenue – which accounts for excise and other taxes rose 7% at constant currencies in the three months ended December 31 compared with a 4% rise for the same period in 2014.

However, on a reported basis, revenue fell 8% for the quarter, a steeper decline than the 5% the company posted a year earlier as the brewer said its key operating currencies lost ground against the dollar.

SABMiller is in the middle of being acquired by AB InBev, with the deal expected to close in the second half of this year. Both companies have moved to sell parts of SABMiller’s businesses in the U.S and Europe to appease regulators but haven’t yet said what they are going to do with SABMiller’s 49% stake in a joint-venture with China Resources, maker of the Snow brand in China and the world’s largest beer brand by volume.

SABMILLER’S Q3 SALES PERFORMANCE BY REGION
REGION Q3 SALES 9-MONTHS YTD
AFRICA 12% 10%
ASIA PACIFIC 5% 4%
EUROPE 6% 1%
LATIN AMERICA 8% 8%
NORTH AMERICA -1% -1%

SABMiller reported a 5% rise in net producer revenue at constant currencies for the Asia Pacific region, with China accounting for 6% of the growth despite lower beverage volumes in the country.

In Africa, the company posted a 12% increase in sales, with South Africa accounting for 16% of the volume growth, helped by warm weather. SABMiller recently announced that it would likely pull out of South Sudan because of difficulties accessing foreign exchange to buy raw materials.

SABMiller’s soft drinks businesses grew 8% with double digit growth in Africa and what the company described as a “subdued performance” in Latin America.

In Latin America, net producer revenue for the company rose 8% buoyed by growth in Colombia and Peru. However, volumes of the brewer’s non-alcoholic malt beverage, declined after news of what the company said was “an unfounded rumour on the popular Whatsapp messaging system in Latin America went viral about a plant operator’s body being discovered in a Pony Malta storage tank.”

The company’s revenue rose 6% in Europe, helped by U.K., Poland, the Czech Republic and Slovakia.

Sales in North America, however, were negative, less than 1%, a similar decline seen a year earlier. Large brewers in the U.S have been struggling to grow sales as consumers have shunned big name lagers for craft beer and spirits.

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