SABMiller FY16 Results Weak On Currency; Sees Good Performance In New Year

(RTTNews) - British brewer SABMiller Plc. (SBMRY.PK, SAB.L), which is in $105 billion deal to be bought by Belgian brewer Anheuser-Busch InBev NV, or AB InBev (BUD, AHBIF.PK), Wednesday reported a decline in profit for fiscal 2016, reflecting higher charges and weak revenues amid negative foreign currency impact. On an organic constant currency basis, revenues grew 7 percent. Further, the company announced higher dividend.

Looking ahead, the company expects to deliver good underlying performance in the year ahead. Cost and efficiency programme is on track to reach targeted annualised savings of $1.05 billion per annum by the financial year ending March 31, 2020.

The company anticipates that it will continue to face foreign exchange volatility and the results of certain of key operations would be impacted by currency depreciation against the US dollar.

For the year, profit before tax declined 16 percent to $4.074 billion from last year's $4.83 billion. Earnings per share dropped to 166 US cents from 203.5 US cents last year.

The latest results reflect exceptional charges of $721 million, principally relating to the impairment of investments in Angola and South Sudan, together with costs associated with the AB InBev transaction.

Adjusted earnings per share were 224.1 US cents, compared to 239.1 US cents a year ago, as the depreciation of key operating currencies against the US dollar impacted results.

On an organic, constant currency basis, EBITA grew 8 percent and EBITA margin increased by 60 basis points.

Revenue declined 10 percent to $19.83 billion from prior year's $22.13 billion.

Group net producer revenue or NPR declined 8 percent to $24.15 billion, with weak results in all regions except North America, where the results were nearly flat. Organic constant currency Group NPR grew 5 percent, with group NPR per hl growth of 3 percent.

Premium lager brands' NPR grew by 11 percent, while global lager brands' NPR increased 13 percent, with growth across all regions.

Group beverage volumes increased 2 percent to 330.87 million hecto liters, with lager volumes up 1 percent and soft drinks volumes up 6 percent. A strong growth in Africa and Latin America was moderated by volume weakness in China and the USA, the company said.

Further, the company announced full-year dividend per share of 122.0 US cents, up 8 percent on prior year, with final dividend of 93.75 US cents per share payable on 12 August.

Regarding its recommended acquisition by AB InBev, the company said significant progress has been made to date, and expects to complete the transaction during the second half of 2016. But they do not anticipate completion occurring before the payment of the final dividend to SABMiller shareholders on August 12.

In London, SABMiller shares were trading at 4,215.50 pence, up 0.13 percent.