SABMiller's quarterly results beat expectations but strong dollar weighs on revenue

Brewing giant SABMiller delivered better-than-expected third quarter results, as a combination of unusually warm weather in Europe and strong growth in its Latin American and African businesses drove the group's net producer revenue (NPR) sharply up.

In the three months to 31 December, NPR was 7% year-on-year, beating analysts' expectations for a 5% gain, although that fell 8% from the corresponding period in 2014 when foreign exchange was taken into account.

SABMiller, which is set to be taken over by sector peer Anheuser-Busch InBev NV, said in the year to date NPR grew 5% on a constant currency basis but was down 9% year-on-year on a reported basis, due to a strong US dollar.

In 2015, the brewer revealed it had doubled its target for cost reductions to $1.05bn (£740bn) by 2020 in a bid to match the profit margins of its acquirer, which is aiming to achieve a further $1.4bn in annual savings itself.

The London-listed company said lager volumes across the company rose 3% year-on-year, driven higher by 7% growth in Latin America, which was itself boosted by a 13% surge in Colombia. Meanwhile, soft drink volumes increased 8% after Africa posted double digit growth, with 12% growth in revenue and an 8% growth in beverage volumes for the period.

Chief executive Alan Clark said the group was pleased with the results, although it rued the strong currency headwinds.

"Group NPR growth was held back by headwinds in our associates' and joint ventures' major markets and continued industry trends in the USA," he 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."