SABMiller’s Q1 revenue rise 2% despite persistent headwinds in Africa

SABMiller on Thursday said net producer revenue for the first quarter rose 2% as it continues to battle economic volatility in key markets in China and Africa.

The maker of Castle Lager, Hero and Grand Lager beer, among others said that volumes in its African markets were weighed by economic volatility and challenging trading conditions.

In Latin America, the brewer saw sales rise 5% but volumes were marginal at 1%. Overall sales in the region were helped by a 7% bump in Columbia on a 4% volume lift. However, soft drinks volumes in the country fell 20% as the brewer’s flagship malt drink, Pony Malta hadn’t recovered from what the company called an “unfounded social media rumour” in October about a body being discovered in one of the company’s malt storage tanks. Peru posted a 6% sales rise, while Ecuador struggled from the effects of an earthquake earlier in the year and a 66% increase in excise tax in May plus a VAT rise in June. Volumes in the country fell 19%, while soft drinks volumes even fared worse as it slid 32%.

Sales in Africa rose 6%, while volumes remained flat. The brewer said that some African markets were impaired by “challenging trading and macroeconomic conditions and consumer pricing effects.” It added that local currencies are the subject of “ongoing material depreciation.”

However, sales on the continent were helped by growth in some key markets. South Africa saw a 6% rise in revenue, while volumes rose marginally at 2%. The star performer for the brewer was Nigeria which saw a 36% rise in revenue and a healthy volume lift. Angola was filled with challenges as SABMiller’s African partner, Castel Group said it had scaled back its activities in the country due to “weak economic fundamentals.”

Asia Pacific Region saw sales and volumes fall 2% and 3% respectively. The brewer fared better in some countries than others. Australia registered a 7% rise in sales, while China saw sales and volumes decline by 4% respectively.

Europe was a star performer for SABMiller as sales and volumes rose 6% and 8% respectively. Czech Republic and Slovakia registered 12% gains in sales, while Poland was an even better performer with 14% rise in sales on a 22% volume lift. The U.K. had a respectable showing with sales rising 13%. Other SAB subsidiaries across the continent, particularly in Romania and Hungary did equally well.

North America for SABMiller was a tale of woes as its MillerCoors joint-venture saw a 4% fall in domestic sales to wholesalers and 2% decline in sales to retailers. There were some bright spots like Henry’s Hard Soda which saw a slight bump in sales. Overall, the brewer saw a 3% sales dip for the quarter while volumes declined 4%.

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