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Johannesburg - Asia was brewing giant SABMiller's best performer in first half of its financial year as the only region to report positive top line growth.
SABMiller reported a 13% revenue increase to $1bn in Asia for the interim period to end-September. Analysts were also impressed with its North American performance, even though it reported a 2% revenue decline to $2.8bn.
"That revenue is only down 2% in a market dominated by the US is a great performance," said Absa Asset Management analyst Chris Gilmour. "The result there was not about performance, but about driving down costs. That is testimony to the strength of the joint venture between Millers and Coors."
Gilmour said SABMiller has been effectively using its partner's market knowledge to continue driving down costs. "Had SABMiller been on its own there, the result would have been very bad," said Gilmour.
Testimony to the cost-cutting exercise is the 7% improvement in earnings before tax, interest, depreciation and amortisation (Ebitda) to $379m, which resulted in an Ebitda margin of 13.2%, up from 12.2%.
Europe offers little beery cheer
Despite the severity of the economic recession, North America continued to drink beer, with a total 24 million hectolitres consumed in the quarter to September. That was 5% lower than the same time in 2008, but far better than the 42% drop in soft drink volumes.
The $379m Ebitda helped maintain North America as SABMiller's second most profitable region after Latin America. On the back of a 4% revenue drop, Latin America grew Ebitda by 19% to $566m.
Although Asia - dominated by China and India - saw an improvement in revenue and volume growth, margins were still poor at 8.8% (from 8% previously).
However, the resultant $90m Ebitda was a 24% improvement.
Europe was the worst performer in both revenue and profitability. Revenue fell 20% while Ebitda also fell 19% to $590m. Lager volumes declined by 6% to 27 million hectolitres consumed.
By midday on Thursday, SABMiller traded at R217.29 per share, up 4.6% for the day.
- Fin24.com