LONDON (Alliance News) - SABMiller PLC on Wednesday reported a fall in profit in its recently-ended financial year as revenue continued to be hit by negative foreign exchange translations, which the Anglo-South African brewer said it expects to persist in the current financial year.
SABMiller said its pretax profit in the year ended March 31 fell to USD4.07 billion from USD4.83 billion the year before, lower than Societe Generale's forecast of USD4.11 billion which the bank had previously said was below consensus.
SABMiller is in the process of being taken over by Belgian-American drinks company AB InBev in a GBP71.00 billion deal. The merger is expected to complete during the second half of 2016.
"We are continuing to support AB InBev in obtaining the necessary regulatory clearances for the recommended acquisition of SABMiller by AB InBev, and in convergence planning for post change of control. Significant progress has been made to date, and AB InBev continues to work with the relevant authorities around the world in seeking to bring all regulatory reviews to a timely and appropriate conclusion," SABMiller said.
Shares in SABMiller were trading up 0.3% at 4,221.00 pence on Wednesday.
For the recent financial year, SABMiller booked an exceptional charge of USD721 million due to impairments in Angola, where it had undertaken an impairment review, and in South Sudan, where it closed the brewery, and also due to costs associated with its takeover by AB InBev. Exceptional charges in the prior year totalled USD153 million.
Group revenue decreased to USD19.83 billion from USD22.13 billion, which SABMiller said was due to the depreciation of its key operating currencies against the dollar, something which has been harming the global drinks producer for some time now. Revenue would have risen by 7% on a constant currency basis, it said.
Group net producer revenue, which comprises group revenue as well as its share of associates' and joint ventures' revenue, declined by 8% to USD24.15 billion from USD26.29 billion, but would have risen by 5% on a constant currency basis.
Group beverage volume, however, rose 2%, with lager volume up by 1% and soft drinks volume up by 6%, with strong growth in Africa and Latin America moderated by weakness in China and the US, SABMiller said.
In Latin America, NPR fell by 10% but grew by 8% on a constant currency basis, as beverage volume increased by 5%. SABMiller said growth was supported by momentum in its mainstream and premium brands, with good performances in Colombia, Peru, Honduras and El Salvador offsetting weaker performances in Panama and Ecuador.
In Africa, NPR decreased by 9% but increased by 11% on a constant currency basis, as beverage volume grew by 6%. SABMiller said growth was supported by selective price increases and continued premiumisation in South Africa, with good performances in South Africa, Tanzania, Mozambique, Zambia, Nigeria, Botswana, Ghana and Uganda, but a weak performance in Angola.
Meanwhile, NPR in Asia Pacific fell by 6% but rose by 3% on a constant currency basis, as beverage volume declined by 1%. Australia and India performed well, but China suffered from "tough industry and macro-economic headwinds", SABMiller said.
In Europe, NPR dropped by 13% but increased by 2% in constant currencies, with beverage volume in line with the prior year. The Czech Republic and Slovenia demonstrated good performances, supported by a continued focus on sales execution and favourable weather throughout the year. Poland, however, suffered from "significant competitor activity" in the first half. The UK, Italy, Romania, the Netherlands and Hungary all achieved growth.
Finally, NPR for MillerCoors in North America fell by 1% in constant currencies as net pricing and a favourable sales mix were offset by lower volume. Domestic sales to both wholesalers and retailers declined by 2%.
SABMiller will pay a total dividend of 122 cents, which is up 8% on the prior year.
SABMiller said it is on track to achieve its cost-saving target of USD1.05 billion per annum by financial 2020, having delivered net annualised savings of USD547 million in financial 2016.
"We expect to deliver good underlying performance in the year ahead," SABMiller said in a statement.
"We anticipate that we will continue to face foreign exchange volatility and the results of certain of our key operations would be impacted by currency depreciation against the US dollar," the company added.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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