Currency woes spoil the SABMiller party

The crushing depreciation of the South African rand, one of brewer SABMiller’s key operating currencies, has severely held back its reported third quarter results.

SABMiller CEO Alan Clark (Photo: SABMiller)

On a reported basis, group revenue declined by 8% for the three months to 31 December, and by 9% for the year to date.

The Peroni and Grolsch brewer – brands that will soon be offloaded as part of its takeover by AB InBev – blamed the “continued depreciation of our key operating currencies against the US dollar”.

One South African rand is now worth just 0.06 dollars, less than half its value five years ago.

Alan Clark, SABMiller CEO, said: “Our reported results are materially impacted by the significant depreciation of our key operating currencies against the US dollar but the underlying performance we are reporting today reflects the strength of our business and the dedication of our people.”

Leaving currency fluctuations aside, SABMiller had a more impressive three-month period, with volume and value sales increasing in the low single figures.

Organic revenue was up 7%, volumes up 4% and value sales saw a 3% uptick.

However, while all regions saw good organic growth, revenues in North America declined by 1% and volume sales dropped by 2%. Only value sales saw a slight 1% growth.

“Continued industry trends” negatively affected the US market, Clark said, as the group acknowledged taste shifts away from its lighter below-premium brands.

Latin America saw 8% revenue growth, Europe saw an impressive 6% growth, Africa grew by 12% and Asia Pacific grew by 5%.