To: John who wrote (65763 ) 11/19/2010 4:07:22 AM From: elmatador Respond to of 217709 SABMiller gains from emerging markets’ thirst. Emerging markets accounted for most of the revenues and profits, with Latin America contributing $676m of earnings before interest, tax and amortisation and North America contributing $480m. South Africa and the rest of Africa are also big profit engines. SABMiller gains from emerging markets’ thirst By Louise Lucas Published: November 18 2010 20:38 | Last updated: November 18 2010 20:38 Shares in SABMiller firmed 3 per cent on Thursday after the world’s second-biggest brewer by volume reported a 13 per cent rise in interim profits. The brewer received a fillip from the football World Cup in the summer and offered a cautiously upbeat outlook. Graham Mackay, chief executive, said that although consumer spending stayed subdued, incremental improvements in emerging markets were “expected to be maintained”. In the six months to September 30, pre-tax profits rose from $1.5bn (£934m) to $1.69bn on revenues that increased 7 per cent from $8.85bn to $9.45bn. The interim dividend is lifted from 17 cents to 19.5 cents, to be paid from earnings per share up from 63 cents to 71.2 cents. Emerging markets accounted for most of the revenues and profits, with Latin America contributing $676m of earnings before interest, tax and amortisation and North America contributing $480m. South Africa and the rest of Africa are also big profit engines. However, volumes fell in the two biggest markets of Latin America, where tax increases in Colombia caused the brewer to raise prices in February, and in Europe, where volumes dropped 5 per cent year-on-year. SABMiller attributed this to the difficult economic conditions that depressed consumer spending and beer consumption. SABMiller’s more optimistic outlook contrasted with rival Carlsberg’s gloomier prognosis. Earlier this month it warned of looming beer price increases in a bid to recover soaring barley and malt prices. Trevor Stirling, Bernstein analyst, said the conflicting views illustrated the two companies’ hedging and forward-buying strategies. While Carlsberg is relatively unhedged in eastern Europe, SABMiller runs much longer hedges and, particularly in the US, buys on long-dated contracts. “The spot price for barley in Europe has seen big swings, but in the US the price paid to farmers – through supply contracts struck for two to three years – is much smoother,” he said. SABMiller shares rose 61p to £21.13.