Foreign exchange movements lead to profit drop for SABMiller, courted by AB InBev
Tuesday, 06 October 2015
SABMiller breweries, which industry leader Anheuser-Busch InBev wishes to buy, revealed on Tuesday that its earnings had dropped in the first semester because of foreign exchange movements. Net income dropped by 9% when some currencies decreased in value against the US dollar in the second quarter (up to the end of September) keeping up the trend of the whole first semester, pointed out the firm, which is listed in London and Johannesburg, in its business report.
At the same time, organic gross revenue at constant exchange rates increased by 6% in the second quarter. On that basis, growth was stronger in Africa (+11%) and Latin America (+9%), followed by Asia (+4%) and Europe (+3%). North America saw a 2% drop.
Overall volumes rose by 2%, and once again Latin America and Africa led the pack, reveals the company which sells several brands such as Pilsner Urquell, Peroni, Miller and Grolsch.
“Yes, negative currency movements had a significant impact on the results we are publishing, but we are still going strong with fantastic long-term prospects,” insisted Alan Clark, SABMiller Managing Director.
“We grew faster in the second quarter of the year thanks to our unique position in the world’s growing markets,” he added.
The report was published early, at a time when Anheuser-Busch InBev revealed in mid-September that it had been in contact with SABMiller, although a formal offer has yet to be made for a merger between the 2 industry world leaders.
However the New York Post suggests SABMiller’s management is thinking of countering a potential offer by Anheuser-Busch InBev, which for its part will not make a hostile bid.