SABMiller Beer Volumes Rise, Warns on Year

Brewing giant SABMiller reported a 1 percent rise in second-quarter worldwide underlying beer volumes on Tuesday but warned of an uncertain year due to slower growth and weaker demand, which sent its shares lower.

The London-based brewer of Miller Lite, Peroni, Castle and Snow beers said the quarterly performance put its half-year (April-September) beer volumes marginally ahead after a 1.6 percent fall in its first quarter.

But it cautioned that prospects for the rest of its financial year to March 2009 were "increasingly uncertain" due to deteriorating global economic conditions, weakening consumer demand and volatile foreign exchange rates.

The warning sent the shares down 1.3 percent to 957 pence in a London market up 4.7 percent dragging other brewing stocks down.

InBev was off 3.5 percent.

SABMiller is the world's largest brewer by volume, but will lose that crown when InBev's $52 billion deal to buy Anheuser-Busch completes later this year.

"We believe that the shares will fall today (relative to the market) as a consequence of its (SABMiller's) downbeat tone," said drinks industry analyst Matthew Webb at broker Cazenove.

SABMiller's shares have dropped from a high of 12.55 pounds in mid-September in line with the FTSE 100, but have underperformed the DJ Euro food and beverage index by 7 percent.

Finance Director Malcolm Wyman warned that slower beer volume growth would hit profit growth despite the group raising prices to offset higher commodity and other input costs.

He added that spot prices for key inputs such as barley, aluminum and glass have recently fallen, but due to the company's forward hedging policy, it would not see a big effect from lower prices in its current year to March 2009.

"These are uncertain times, but beer is still a relatively resilient category," Wyman said.

Its two main markets, South Africa and Colombia, which produce around 40 percent of group profit, were both hit by high inflation and interest rates with the first seeing half-year volumes off 1 percent and the second down 3 percent.

SABMiller's new U.S. venture MillerCoors got off to a positive start with beer volumes up 0.7 percent in its first three months of operation to end-September.

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