Emerging markets bring cheer on sales front for brewer

The London-based brewer of Peroni, Grolsch and Miller Lite said yesterday that growth in these markets and also in South Africa helped to offset volume dips in Europe and North America in April through to September.

Beer volume growth, price rises in the prior year, some raw material cost cuts and the strengthening of key operating currencies against the US dollar helped SABMiller's results to meet its own expectations.

SABMiller shares dipped 0.5 per cent to 20.49 in line with a lower London stock market, as higher beer volumes were driven by a strong rebound in the world's biggest beer market China, which is a market of very low profitability.

"We see this statement as a small positive for SABMiller and retain our 'overweight' recommendation," said analyst Matthew Webb at JP Morgan Cazenove, the company's own broking adviser. Webb left his earnings per share forecast unchanged at 186 cents for the year to March 2011.

Investors were looking for slightly higher beer volumes based on a Reuters poll of 10 banks and brokerages, with forecasts ranging from –0.5 to +1 per cent and a consensus for growth of 0.3 per cent after a first quarter April-June fall of 1 per cent.

The brewer, which earns over 80 per cent of its profits in the emerging markets of Colombia, South Africa, Poland and China, is seen by analysts as interested in buying Foster's beer interests or the African beer business of France's Castel.