SABMiller Plc, the brewer due to be bought by Anheuser-Busch InBev NV later this year, reported a decline in full-year profit, as it was saddled with charges related to some African operations and costs associated with the takeover.
Adjusted pre-tax profit fell 16 per cent to $4.1 billion in the year through March, the London-based maker of Castle Lager said in a recent statement. Earnings were hurt by a $572-million charge, as the brewer scaled back operations in Angola and war-torn South Sudan, as well as $160 million in costs associated with the AB InBev deal.
The results showed “a good second half”, according to Exane BNP Paribas analyst Eamonn Ferry, noting that profit margins expanded by 60 basis points, excluding currency effects. “SABMiller cannot be accused of slacking, post the AB InBev bid. The sizable exceptional amount is worth highlighting, though.”
The maker of Blue Moon wheat ale is shedding some assets and shuffling others around as it awaits regulatory approval for the takeover. AB InBev is selling SAB’s Peroni, Grolsch and Meantime brands in Europe to satisfy antitrust concerns as it seeks to close the deal in the second half of the year. Last week, AB InBev transferred SAB’s Panamanian business to its Brazilian AmBev unit, moving the companies one step closer together.
Ongoing turmoil in South Sudan and a lack of hard currency prompted SABMiller to close its brewery there, and it will now operate as an import business, the brewer said. Currency devaluations have also weighed on the brewer in the country, as well as in Angola. The shares were little changed in early London trading.
SABMiller also said that it expects its performance to be crimped by the strong dollar in the year ahead, as it prepares to be absorbed into its Belgian rival in the industry’s biggest-ever deal. It said that it still expects the transaction to close in the second half of the year, sometime after SABMiller pays its final dividend on 12 August.
The brewer had already reported a gain in fourth-quarter beer shipments, led by growth in Africa and Latin America. SABMiller gets more revenue from developing regions than other major brewers, a key element of its appeal for the maker of Budweiser.
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