SABMiller earnings up 21%

Global brewing giant SABMiller Plc has reported adjusted earnings per share (EPS) of 1 021.2 (SA) cents for the year ended March 2008 from 847.1 cents a year - an increase of 21%.

In US cents, adjusted EPS rose 19% to 143.1 (US) cents from a previous 120 (US) cents. Basic EPS were up 22% to 134.9 (US) cents.

The board has proposed a final dividend of 42 (US) cents per share for the year, which brings the total dividend to 58 (US) cents, a 16% increase.

Revenue was 15% higher at $21.4 billion, while adjusted earnings were 20% higher at $2.147 billion.

Group lager volumes up 11% to 239 million hectolitres (hl), organic growth of 7%. The group said the strong results were achieved despite challenging comparative growth rates across a number of markets in the prior year and a substantial rise in input costs for the group as a whole.

Total beverage volumes were up 6% to 288 million hl and total lager volumes were up 11% to 239 million hl, including the impact of acquisitions in China and Europe.

Strength of brands pays off

A 15% increase in group revenue translated into EBITA growth of 15% to $4.141 billion, or 9% on an organic constant currency basis. This reflects the benefit of price increases, mix improvements and productivity gains, all of which have offset the rise in input costs, in addition to favourable currency rates against the dollar.

"The group's ability to recover these higher costs underlines the strength of its brands and its operational capability in enhancing net revenue per hectolitre through effective control of package mix and portfolio pricing," it said.

Earnings benefited from currency strength and lower effective tax rates in certain jurisdictions. Adjusted earnings and adjusted earnings per share grew 20% and 19% respectively on the prior year.

During the year, underlying consumer demand in the group's developing markets has remained strong, with high levels of fixed investment within Africa, Asia and South America contributing to good GDP growth in these regions, the group said.

Over the course of the year the group has invested some $1.978 billion in additional production capacity, new containers and distribution, to ensure the business will be able to continue to take advantage of the growth in its markets. The group's premium brand strategy has driven mix benefits across a number of markets, with significant investment behind new product and packaging innovations.

Outlook remains positive

Net cash generated from operations after working capital movements was 6% above the prior year, reflecting an increase in working capital across the group as at March 31 2008, due principally to the timing of Easter. Gearing increased during the year to 49.7% from 45.8% principally as a result of increased borrowings to fund the acquisition of the Grolsch business and the capital expenditure programme.

Looking ahead, the group said in the current year volume growth in the first half will be affected by high comparative growth rates, and pressure on input costs will continue to increase although pricing and mix benefits are again expected to compensate for these cost increases.

"The economic outlook across our global footprint, which is biased towards growth markets in developing countries, remains positive, and we will continue to benefit from the strength of our brands, operational capability and investment for growth," it said.

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