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SABMiller Profit Tops Estimates on Developing Markets

SABMiller Chief Financial Officer Malcolm Wyman
SABMiller Chief Financial Officer Malcolm Wyman said in a Bloomberg Television interview the brewer is interested in making acquisitions. Photographer: Daniel Acker/Bloomberg

SABMiller Plc, the maker of Grolsch and Peroni beers, reported first-half profit that beat analysts’ estimates on growth in all regions outside Europe, sending the shares to a record high.

Adjusted earnings rose 19 percent to $1.47 billion in the six months ended September from $1.24 billion a year earlier, the London-based company said today. The average of 12 analyst estimates compiled by Bloomberg was $1.37 billion.

Profit increased in four out of five continents, driven by volume growth in Africa and China, higher prices and the strength of the company’s major operating currencies against the dollar. Markets in the U.K., France and Germany are “reasonably depressed,” Chief Executive Officer Graham Mackay said.

“The company is very well positioned for sales growth, given its exposure to emerging markets, but it still has more to prove in terms of fixed-cost reduction,” Matthew Jordan, an analyst at Matrix Group in London, said by phone. Matrix is likely to raise its full-year earnings estimates, he said.

SABMiller shares rose as much as 105 pence, or 5.1 percent, to 2,157 pence, the highest since they were listed in London in 1999. The stock traded at 2,153.5 pence as of 9:27 a.m.

Profit in Europe fell 4 percent excluding currency shifts and acquisitions. The western part of the continent is performing worse than the east, Mackay said on a conference call, with some consumers “downtrading” from beer to spirits.

Latin America

In Latin America, SABMiller’s biggest region, earnings before interest and tax rose 10 percent as price rises and lower raw materials expenses offset a decline in volume caused by poor weather and five “dry days” around Colombia’s election.

Profit rose 8 percent in the South African beverages unit, 22 percent in Asia and 27 percent in North America.

SABMiller, the world’s second-biggest brewer by volume, is interested in making acquisitions, Chief Financial Officer Malcolm Wyman said in a Bloomberg Television interview. He declined to comment on Foster’s Group Ltd. amid reports that SABMiller may bid for its beer division.

The brewer plans to raise prices “selectively,” based on “incremental improvement” in economic conditions. Benefits from lower raw-material costs and increased productivity will be at “a more moderate rate” in the second half, it also said.

Group revenue, which includes sales from associates such as MillerCoors LLC, rose to $14.2 billion from $13.4 billion a year earlier. That exceeded the $14 billion average estimate.

Net income climbed to $1.12 billion from $973 million a year earlier, compared with the $1.24 billion average estimate.

Shareholders will get an interim dividend of 19.5 cents a share, up from 17 cents a year earlier.

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