SABMiller’s profit down 18% in full-year on FX write-downs, merger costs

SABMiller Plc, the global behemoth in the midst of being acquired by its bigger rival, Anheuser-Busch InBev (AB InBev), said on Wednesday that its full-year net profit ending March 31 2016 fell 18% due to impairment charges related to closure of its business in South Sudan and a partial pull-back of its activities in Angola ($561m). Both countries have suffered from devaluation of their currencies, making obtaining foreign currencies difficult for businesses.

There was also a write-down for expenses (staff costs, investment banking fees) related to the ongoing acquisition by AB InBev ($160m) .

The brewer of Miller Light, Castle Lager, Trophy Lager, among others said net profit fell to $2.9bn for the year ending March 31 2016, from $3.3bn the previous year,  partly due to the $721m write-down of its investments in Angola and South Sudan and costs relating to the acquisition by AB InBev.

SABMiller reported declines in revenue across all five geographic regions where it does business, with revenue falling 10% across the board to $19.83bn, blamed on currency headwinds associated with a stronger dollar.

Africa, its highest revenue contributor at $6.8bn, reported a decline of 9% from previous year’s $7.5bn. Latin America, the brewer’s second best revenue earner at $5.2bn, fell 10% from the previous year’s $5.8bn.

The brewer said that total volume was tempered by weaknesses in China and the US. Lager sales in Europe continued to be weak for the year. According to the brewer, consumers in Europe and America have been drinking less of mainstream lager.

Beverage volumes for the year climbed 2%, with beer volumes rising just 1% and soft drinks volumes up 6%.

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