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Investors cheer SABMiller profits

Nov 22 2012 12:47
Johannesburg - JSE-listed shares of SABMiller [JSE:SAB] surged almost 7% on Thursday after the global brewer posted a jump in first-half profit and raised its interim dividend by 12%.

At 12:36 the shares were trading 6.81% higher at R399.53.

The world's second-biggest brewer met expectations with a 12% rise in first-half profit, and said strong growth in Africa and Latin America should continue during its second half.

Robust demand in emerging markets, which account for around two thirds of group sales, has helped offset the impact of tough economic conditions in Europe and the United States, executive chairperson Graham Mackay also said on Thursday.

"A lot of Eastern Europe is struggling, especially the Czech Republic and Poland, while consumer sentiment is not really positive in Australia either," he told reporters.

The maker of Grolsch, Miller Lite and Peroni said adjusted pretax profit rose to $2.76bn in the six months to September on sales up 11% to $17.5bn, helped by its acquisition of Australian brewer Foster's.

SABMiller, which last year spent $11.8bn on Foster's, said it had contributed significantly to the rise in sales.

"On balance the main emerging markets in which SAB operates remain strong," said Jefferies analyst Dirk Van Vlaanderen who expects the company to maintain its growth in 2013.

Shares in SABMiller, which has expanded rapidly over the past two decades from its South African roots, were up 5.4% at 2 775 pence by 11:40T, valuing the group at £44bn ($70bn).

Anheuser-Busch InBev, the world's largest brewer, and Dutch group Heineken last month also reported strong emerging market sales and said volumes in Europe were falling, hit by a challenging economic environment.

SABMiller, which also makes Aguila, Castle, Pilsner Urquell and Snow beers, said the positive impact from acquisitions and business combinations seen in the first half could reduce next year.

The company, which raised its interim dividend 12% to 24 cents, said total volumes were up 9% during the period with beer volumes, excluding acquisitions and disposals, up 4%. Soft drinks volumes rose 6%.  

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