SABMiller tops up profit, warns on growth and costs

By David Jones

LONDON (Reuters) - SABMiller, the world's biggest brewer, beat forecasts with a 19 percent rise in annual earnings but added beer volume growth in its current first-half will be hit by high input costs and high comparative figures.

The London-based maker of Miller Lite, Peroni and Pilsner Urquell beers posted adjusted earnings per share on Thursday of 143.1 U.S. cents for the year to March 31, against forecasts of 134.1 to 142.1 cents and a consensus of 137.8 cents.

It added the economic outlook across its global operations, biased towards growth markets in developing countries, remains positive, but added a note of caution.

"In the current year, volume growth in the first half will be affected by high comparative growth rates, and pressure on input costs will continue to increase although pricing and mix benefits are again expected to compensate for these cost increases," it said in a results statement.

The group, which bought Dutch brewer Grolsch in February and is waiting for approval to combine its U.S. operations with Molson Coors proposed a full-year dividend up 16 percent at 58 U.S. cents a share.

Analysts said SABMiller shares are likely to open higher after producing above-forecast results and a generally positive outlook, with the company saying it is able to offset higher input prices through high beer prices and efficiency gains.

This resulted in the group's annual EBITA (earnings before interest, tax and amortization) margin remained level with the prior year at 17.4 percent, even though costs rose sharply.

The brewer is seeing beer volume growth slow as it pushes through price rises to offset the higher cost of commodities such as grain, glass and aluminum, while high-margin areas such as South Africa and Latin America suffer from slower economic growth.

Underlying beer volumes in its financial year grew 7 percent but analysts say growth slowed to 1 percent in its fourth quarter to end-March.

This month, the world's No 2 brewer InBev reported lower-than-expected first-quarter earnings as costs jumped nearly 10 percent and it suffered from weak beer markets in Brazil and Russia, two of its key growth regions.

SABMiller shares trade at 15.3 times March 2009 forecast earnings, largely in line with rivals InBev on 15.4 and Heineken's on 15.8, according to Reuters Estimates.

Analysts say SABMiller's faster growth is offset by concern about South Africa and other emerging markets and currencies.

SABMiller shares have recovered from a low of 995 pence in mid-March follow a sharp sell-off in January due to rising cost and currency concerns, but have underperformed the DJ Stoxx European food and beverage index by 7 percent over the past 12 months.

They closed on Wednesday at 12.03 pounds.

(Reporting by David Jones; Editing by Louise Ireland and David Hulmes)

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