SABMiller Plc (SAB.L), the world's second biggest brewer by volume, reported Thursday a decline in profit for the first half, affected by lower revenues and the weakness of major operating currencies against the US dollar. Revenues for the period dropped 21%, and the company said it expects the current trading conditions to continue in the second half. In addition, SABMiller said it has begun a major business capability programme, through which the company expects to lower costs progressively by about 40% year-on-year in each of the financial years 2011 to 2013. The U.K.-based company's profit before tax for the half year declined to US$1.5 billion from US$2.02 billion in the previous year. On an adjusted basis, pre-tax profit rose 3% to $1.92 billion from $1.86 billion in the prior year. Profit attributable to equity shareholders was US$973 million or 62.6 cents per share, compared to a profit of US$1.42 billion or 94.3 cents per share in the prior year. Adjusted earnings rose 10% to US$1.24 billion from US$1.13 billion last year, and adjusted earnings per share grew to 79.5 cents from 74.8 cents a year ago. According to the company, the growth in adjusted earnings was due to lower finance charges and reduced profit attributable to minority interests following the purchase of the 28.1% minority interest in its Polish subsidiary Kompania Piwowarska in May 2009 in exchange for the issue of 60 million ordinary shares. Revenues for the period dropped 21% to US$8.85 billion from US$11.17 billion in the same period last year. Group revenue, including attributable share of associates' and joint ventures' revenue, dropped 6% to $13.36 billion from $14.22 billion in the prior year. Group revenue increased by 3% organically in constant currency, helped by firm pricing and cost efficiency, the company said. Segment-wise, revenues from Latin America decreased to US$2.74 billion from US$2.84 billion in the previous year. Revenues from Europe declined to US$3.2 billion from US$3.99 billion in the year-ago period. North America reported revenues of US$57 million, down from US$1.5 billion in the preceding year. Revenues from Africa declined to US$802 million from prior year's US$815 million and Asia posted revenues of US$226 million, compared to US$248 million last year. Revenues from South Africa grew to US$1.82 billion from US$1.77 billion a year ago. During the period, the company recorded net exceptional charges of US$222 million before finance costs and tax, compared to net exceptional credit of US$371 million in the prior-year period.
Net exceptional charges include US$11 million related to the group's share of joint ventures' and associates' exceptional charges, US$170 million of business capability programme costs in Latin America, Europe, Africa, Asia, South Africa Beverages and Corporate as well as a charge of US$41 million related to integration and restructuring costs in Europe.
Operating profit for the period was US$1.21 billion, down from US$2.15 billion in the year earlier. Operating profit before exceptional items decreased to US$1.42 billion from US$1.75 billion in the preceding year.
Net operating expenses fell to US$7.63 billion from US$9.01 billion in the comparable period a year ago.
Lager volumes decreased 1% on an organic basis with growth in Africa and Asia offset by weaker volumes in other markets. The company noted that the benefits of falling commodity prices are not yet fully reflected in costs due to the long term nature of raw material supply contracts and the relative strength of the US dollar in which many of these contracts are priced. Graham Mackay, chief executive said, "In some of the toughest economic conditions seen for decades, we have continued to take share in a number of markets. The weakness of our major operating currencies against the US dollar has affected reported results, but we have continued to generate a strong underlying performance. The actions we have taken to position our business globally, to invest in brands and to develop our operational capabilities will continue to underpin our long term growth." Looking ahead, the company said it expects the current trading conditions to continue in the second half, as unemployment, retail spending and other consumer indicators lag the reported stabilisation of GDP in many of its markets. The company also expects second half reported results to benefit from favorable currency movements, provided its major operating currencies remain at or near current exchange rates to the US dollar. In addition, the group said it has begun a major business capability programme that will simplify processes, reduce costs and allow local management teams to enhance focus on their markets. The programme is expected to take four years to complete with spend weighted to the start of the programme. The company anticipates exceptional costs of about US$370 million to be recognized in the current year's income statement, with US$187 million in the first half, with costs lowering progressively by about 40% year-on-year in each of the financial years 2011 to 2013. The company also expects cost and efficiency savings to rise to approximately US$300 million per year by the 2014 financial year.
Further, the board declared a cash interim dividend of 17 US cents per share, an increase of 6% from the prior year. The dividend will be payable on December 11, 2009 to shareholders registered on the London and Johannesburg registers on December 4. SAB.L is currently trading at 1,687 pence, up 30 pence or 1.81%, on a volume of 797 thousand shares. In the past 52 weeks, the shares have been trading in a range of 905.5 pence - 1,697 pence on the LSE.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.