SABMiller sales up in emerging markets

The world's second-biggest brewer, The UK's SABMiller, reported a 7-per cent increase in half-year group revenue at $14.2 billion and half-year pre-tax profits of $1.69 billion as against $1.498 billion last time, which sent its shares up 90.5p to £21.07 in morning trading yesterday.

However, according to SABMiller, which owns the Peroni and Grolsch beer brands, earning upwards of 80 per cent of its profits from emerging economies, markets in Africa and Asia had fully recovered though, high unemployment in mature markets was keeping beer sales from picking up.

SABMiller said that while trading and economic conditions across its markets remained mixed over the first half of the year, lager volumes gained 1 per cent with good volume growth at its China and South Africa operations, offsetting a 5 per cent fall in lager volumes in Europe.

The company said it expected, consumer spending to be slow but the incremental improvement in economic conditions across most of its emerging markets would be maintained.

Graham Mackay, SABMiller chief executive, told reporters, "The outlook is extremely mixed. Emerging markets are fine although some have been hit by tax but developed markets in Europe and North America are struggling."

According to the brewer, it would continue to benefit from lower raw material prices such as barley to the end of its March 2011 and then see a small increase in the following year as higher grain prices fed through.