File picture: Denis Farrell File picture: Denis Farrell
London - Poor summer weather in China hit SABMiller’s lager sales in the second quarter, although higher prices and a jump in soft drink sales helped boost revenues.
The world’s second-biggest brewer of lagers has been trying to offset sluggish growth in developed markets with cost cuts, marketing drives and acquisitions, while also putting more emphasis on soft drink sales in emerging markets.
Overall revenue rose 3 percent in the three months to September, although the volume of beer sold fell 3 percent, a reversal for its core, high-margin business after a 1 percent rise in the first quarter.
Including soft drinks, total drinks volume was down 1 percent in the second quarter, with a 9 percent rise in soft drinks partly offsetting the decline in beer sales.
“We wonder whether the underperformance of lager versus soft drink volumes will translate into margin pressure when first-half results are reported on November 13,” said James Edwardes Jones, an analyst at RBC Capital Markets.
In the Asia Pacific region, overall drinks volume fell 8 percent in the second quarter. Beer volume in China “declined markedly” during July and August because poor weather in most of the central provinces meant people drank less lager.
Total drinks volume in the second quarter declined 2 percent in North America and 1 percent in Europe. It rose 5 percent in Latin America and 4 percent in Africa.
Edwardes Jones said there was “no sign here of the gradually improving trend we expect for the sector as a whole over the second half of 2014”.
Chief executive Alan Clark called the results “resilient” although they trailed behind estimates from some analysts such as those at Barclays, who expected lager volumes to fall just 1.1 percent in the second quarter. – Reuters