SABMiller Full-Year Profit Falls on Charges in African Units

  • Results hurt by $572 million charge in Angola, South Sudan
  • Brewer expects AB InBev deal to close after Aug. 12 dividend

SABMiller Plc, the brewer that’s due to be bought by Anheuser-Busch InBev NV later this year, reported a decline in full-year profit as it was saddled with charges related to some African operations and costs associated with the takeover.

Adjusted pretax profit fell 16 percent to $4.1 billion in the year through March, the London-based maker of Castle lager said Wednesday in a statement. Earnings were hurt by a $572 million charge as the brewer scaled back operations in Angola and war-torn South Sudan, as well as $160 million in costs associated with the AB InBev deal.

The results showed “a good second half,” Exane BNP Paribas analyst Eamonn Ferry said, noting that profit margins expanded by 60 basis points excluding currency effects. “SABMiller cannot be accused of slacking post the AB InBev bid. The sizable exceptional amount is worth highlighting though.”

The maker of Blue Moon wheat ale is shedding some assets and shuffling others around as it awaits regulatory approval for the takeover. AB InBev is selling SAB’s Peroni, Grolsch and Meantime brands in Europe to satisfy antitrust concerns as it seeks to close the deal in the second half of the year. Last week, AB InBev transferred SAB’s Panamanian business to its Brazilian AmBev unit, moving the companies one step closer together.

Ongoing turmoil in South Sudan and a lack of hard currency prompted SABMiller to close its brewery there, and it will now operate as an import business, the brewer said. Currency devaluations have also weighed on the brewer in the country, as well as in Angola. The shares were little changed in early London trading.

SABMiller also said it expects its performance to be crimped by the strong dollar in the year ahead, as it prepares to be absorbed into its Belgian rival in the industry’s biggest-ever deal. It said it still expects the transaction to close in the second half of the year, sometime after SABMiller pays its final dividend on Aug. 12.

The brewer had already reported a gain in fourth-quarter beer shipments, led by growth in Africa and Latin America. SABMiller gets more revenue from developing regions than other major brewers, a key element of its appeal for the maker of Budweiser.

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