Shrugging off the depreciation of the South African rand and other currencies, brewing giant SABMiller has reported profits for the first five months of the current financial year ahead of those reported in 2001.
In a trading update, Graham Mackay, chief executive of the world's second largest brewing group, said that the results from Europe were especially pleasing. "Our Central and Eastern European businesses produced good volume growth, despite the impact of flooding in the Czech Republic. Both Poland and the Czech Republic have performed particularly well. In Russia, volumes are ahead of last year but behind expectations."
The economic difficulties facing the company in Africa were all the more frustrating given that volumes there were well ahead of the previous year. Lager volumes grew in all the company's major markets, and Mackay said that SABMiller's Tanzania unit was already seeing the benefits of East African rationalisation.
However, beer volumes in the core South African market were 0.7 per cent lower than in the previous year, but this was partially due to the fact that they did not include the important Easter period. On a like-for-like basis, volumes would have been slightly higher than in 2001.
In local currency terms, profits from the South African brewing business were also ahead of the previous year, but the depreciation of the currencies meant that this improvement was not transferred to overall profits.
Elsewhere, Mackay said that the group's Central American businesses in Honduras and El Salvador had grown lager beer volumes, but that soft drink sales had been impacted by increased competition. This, together with the region's lacklustre economic performance, resulted in profitability remaining behind expectations, but rationalisation and integration initiatives were continuing, he said.
In the United States, Miller Brewing's own lager volumes for the two months since the merger with SAB were in line with our expectations but below last year's levels, Mackay said, although this was offset by a continuing improvement in pricing trends and higher contract brewing volumes.