Brewing giant SABMiller beat forecasts with just a 4% dip in annual earnings on Thursday and warned that the strong dollar and high commodity costs would continue to hit the group in the current year.
The London-based maker of Miller Lite, Peroni and Castle beers posted adjusted earnings per share of 137,5 U.S. cents for the year to end-March compared to analysts forecast range of 123 to 137 cents and a consensus figure of 130 cents.
Analyst Matthew Webb at brokers Cazenove said the results were ”very resilient” and he upgraded his forecast earnings for the current year to March 2010 to 146 cents from 135 cents previously, and said he expected shares to rise.
The group, which also brews Grolsch, Snow, and Pilsner Urquell, reported flat underlying annual beer volumes, but saw underlying sales up 9% helped by price rises and operating profits 5% ahead after stripping out currency effects.
”Global economic conditions and consumer demand weakened during the year and there remains little visibility as to the timing of any recovery,” the group said in a statement.
”In the current year we expect commodity cost pressures to continue, given existing contractual arrangements. In addition, the currency translation effect of the strong US dollar will impact our results,” the group added.
However, the group said it remains confident in its medium-term prospects as it looks to cut costs and investment spending as the brewer suffered as economic conditions have worsened and demand fell in most of its markets.
The brewer also said it had acquired the remaining 28,1% minority interest in its Polish subsidiary Kompania Piwowarska, in exchange for 60 million new SABMiller shares putting a value on the stake at $1,11-billion. — Reuters