23rd Jul 2015 10:02
LONDON (Alliance News) - SABMiller PLC Thursday reported a drop in reported net producer revenue in the first quarter of its financial year but said revenue grew on a constant currency basis, although it still missed analyst expectations and beverage volumes remained flat.
The brewer, which makes Grolsch, Peroni and Coors beers, said that reported net producer revenue in the quarter to June 30 declined 10% due to the depreciation of some currencies against the US dollar, but grew 3% on a constant currency basis.
According to Shore Capital, the 3% constant currency growth was still below a 3.8% consensus estimate and Shore's forecast of 5% growth.
Beverage volumes were flat in the quarter as good beverage volume growth in Latin America and Africa was offset by declines in Europe, Asia Pacific and North America, SABMiller said, adding that soft drinks volumes were up 4%, partly offset by a 1% decline in lager volumes.
Volumes grew 5% in Latin America, as lager volumes grew 4% and soft drinks volumes rose 7%, driven by a strong performance in Colombia. In Africa, volumes grew 4%, but declined 5% in Asia Pacific, 6% in Europe and also declined in North America.
On a constant currency basis, net producer revenue increased 6% in Latin America and 7% in Africa, but fell 2% in Asia Pacific, 4% in Europe and remained in line with the prior year in North America.
"Both revenue and volumes grew strongly in Latin America and Africa in the quarter, tempered in particular by a challenging quarter in our key European markets where the trading environment remains difficult and softer volumes in China. We continue to make good progress in our strategy of driving top line growth which is reflected in the growth of revenue per hectolitre across our regions," Chief Executive Alan Clark said in a statement.
In May, SABMiller reported a flat pretax profit of USD4.8 million in the financial year ending March 31, and a slight drop in revenue to USD22.1 million from USD22.3 million the year before. It said at the time that the strong dollar had a negative translation on its operating currencies, although its results did actually beat analyst predictions.
The brewer also warned in May that it would continue to be buffeted by currency volatility and challenging conditions in its markets in the current year.
Analysts at Numis said that SABMiller's update on Thursday was "lacklustre" and that it expects consensus estimates to come under some pressure.
"We believe that the outlook for FY16 remains difficult: whilst the outlook in Africa is promising, we have concerns about a backdrop of increased competition and difficult trading conditions in the key Latin America market and trading conditions in North America and Europe (especially) remain tough," Numis said in a note.
Shares in SABMiller were trading down 0.6% at 3,418.00 pence Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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