E-Malt.com News article: 3677

South Africa, Cape Town: Beer South Africa, the local division of SABMiller, has registered a 4 % increase in volume of beer sold during the first half of the year to end-September and lifted its share of South Africa's total alcoholic drinks market by 1.5 percentage points to 59.8 %. Beer South Africa continues to dominate the local beer market with a 98.3 % share. The South African performance was one of many highlights in the beer giant's interim results, which saw earnings up an impressive 38 % to $0.49 a share from $0.354 in the previous interim, Business Report revealed on November 19.

SABMiller's investors liked the results, pushing the counter up by as much as 3.7 percent to R98 in the day. It closed at R97.50 in Johannesburg, and is now trading at its highest levels in at least 6 years. The beverages sector rose 3.06 %. An interim dividend of 12c a share has been declared, which is 60 percent ahead of the previous interim dividend. Other highlights included the continued progress with the turnaround at Miller in the US, good performances across Africa and Asia and strong results from Europe, where Russian growth countered the weak Italian performance.

At a results presentation yesterday, group chief executive Graham Mackay said that in South Africa, volume growth was achieved across all market segments "with particularly strong growth in premium beers". He added that Beer SA was assisted by robust economic growth as well as the continued shift in demand from sorghum beer to lager. Beer SA's growth in market share was at the expense of wine and spirits.

In constant currency terms, the contribution from Beer SA was up 16 percent. However, the strengthening of the rand against the dollar saw this convert into a 35 percent advance in dollar terms.

Asked to comment on the current strength of the rand against the dollar, Mackay said that he was not a "currency forecaster", but he pointed out that over the long term, the rand was currently in neutral territory. He said the perception that the rand was currently strong was attributable to the fact that it had gone through a devastating period of weakness a few years ago.

Finance director Malcolm Wyman said that the rand had merely adjusted to the appropriate level in terms of price-purchasing parity. "The SA economy is looking strong, I can't see any reason why the rand should crack, it is at a level that it could maintain for some time," said Wyman.

Referring to the Miller operation in North America, Mackay said that "significant progress" had been made and that "improved brand building together with sales and distribution initiatives have results in strong growth from Miller Lite", which has been the key factor behind a marginal increase in overall Miller volumes. The higher turnover, improved product mix and cost efficiencies achieved saw margins up to 11.7 % from 9.9 % and the earnings contribution from the US up 23 %.


21 November, 2004