SABMiller lifts earnings

SABMiller, the world’s number two brewer, reported a rise in profits for the first half of its financial year, as its business in Africa helped offset declining beer sales in Europe and North America.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 7 percent to USD 3.27 billion in the six months ended 30 September 2013.

Lager sales by volume rose 1 percent. Gains of 9 percent in Africa, 4 percent in Asia Pacific and 1 percent in Latin America helped compensate declines of -4 percent in Europe and -3 percent in North America.

Profits in Europe fell 8 percent as the company sold less beer in Poland and the Czech Republic, which represent about 70 percent of profit in the region, according to SABMiller.

“Europe is trading below our expectations,” the company’s Chief Financial Officer Jamie Wilson was quoted as saying, noting that the region has been tough for a number of quarters.

The whole of Europe is proving difficult for the big brewers. No more so than in Russia. Struggling with a flat economy and escalating government regulation, Russia’s beer market is on course to shrink by 25 to 30 percent from its 2008 size by the end of 2014, Isaac Sheps, Chairman the Union of Russian Brewers, told Russian media in October 2013.

By this estimate, beer production will decrease to between 77 million hl and 82 million hl by the end of the year, down from over 90 million hl 2012.