SABMiller, the brewer that is due to be bought by Anheuser-Busch InBev 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 pretax profit fell 16% to $4.1bn (€3.62bn) in the year through March, the London-based maker of Castle lager said.
Earnings were hurt by a $572m charge as the brewer scaled back operations in Angola and war-torn South Sudan, as well as $160m in costs associated with the AB InBev deal.
The results showed “a good second half,” Exane BNP Paribas analyst Eamonn Ferry said, 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,” he said.
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 competition concerns as it seeks to close the deal later in the year.
Last week, AB InBev transferred SAB’s Panamanian business to its Brazilian AmBev unit, moving the companies one step closer.
Japan’s biggest brewer Asahi Group said earlier this week that it would not bid the eastern European assets SABMiller is selling to appease anti-monopoly regulators.
“We have been studying them but we won’t raise our hand to buy,” Akiyoshi Koji, who became president in March, said.
Mr Asahi is betting on those brands to significantly broaden its presence in Europe. Previously, Mr Asahi’s overseas expansion focused on Asia and Oceania.
Mr Koji also said Asahi plans to eventually sell its Super Dry beer in Europe through its SABMiller acquisition. Super Dry is Asahi’s and Japan’s biggest-selling beer.
Instead, he said Asahi will focus on raising sales of the Peroni, Grolsch and Meantime beer brands that it agreed to buy from SABMiller last month for €2.55bn.
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 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 it still expects the transaction to close in the second half of the year, sometime after SABMiller pays its final dividend on August 12.
© Irish Examiner Ltd. All rights reserved