SABMiller blames poor weather in China and fierce competition in Australia for lower than expected half year profits
Struggle: The brewer, which makes Peroni and Grolsch, revealed that profit margins slipped
SABMiller blamed poor weather in China and fierce competition in Australia for lower than expected half year profits.
The brewer, which makes Peroni, Pilsner Urquell and Grolsch, said profit margins slipped due to falling beer sales in China and some parts of Europe.
Bad weather over the summer meant drinkers supped less beer.
In Australia, where SAB bought Fosters three years ago, supermarkets have been cutting prices as part of a battle for shoppers.
The brewer has had to increase spending on promotions to maintain its share of the market.
Shares rose 43.5p to 3555p despite flat operating profit of £2bn for the six months to the end of September, on sales of £8.5bn.
In Europe, there was a 2 per cent fall in operating profit. Volume growth in Poland, the Czech Republic and the UK was offset by declines in Romania, Italy and Turkey.
Chief executive Alan Clark said: ‘We continued to grow earnings in the first half with challenging trading conditions.’
He said these were mitigated by cost cutting and more efficient beer production and deliveries.
Increased revenues were driven by lager growth in Africa and Latin America and strong performance in SAB’s soft drinks businesses in Africa, Latin America and Europe.
‘Lower lager sales in parts of Europe and Asia Pacific resulted in a small group EBITA margin [profit margin] decline during the half year,’ he said.
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