South Africa: SABMiller increases medium-term forecast for South African operations

SABMiller PLC on February, 14 increased its medium-term forecasts for its South African operations, as the U.K.-based brewer of Grolsch and Peroni Nastro Azzuro issued an upbeat outlook on a recovery in domestic consumer spending, The Wall Street Journal reports.

The company targets 1% to 4% annual growth in lager volumes on a constant currency basis, stripping out exceptionals, in the next three years, up from flat to 3% previously.

It expects overall revenue per hectolitre for lager over the same period to rise percentage-wise in the mid-single digits, around the level of the consumer price index, seen at 4% to 6%.

SABMiller expects its earnings before interest, taxes and amortization margin for South Africa to rise around 30 to 80 basis points on an annual basis in the medium term, up from an earlier range of 20% to 40%.

"The consumer is still under pressure, but we are seeing signs of a slow recovery," the chairman and managing director of the group's South Africa operations, Norman Adami, said at an investor seminar in London.

"The economy in South Africa is still growing. We should be able to grow as the economy grows," he said.

Adami also said commodity cost pressures, which include barley and maize, are likely to ease. "[There are] generally favorable [forecasts] going forward," he said.

Last month, the London-based brewer, which has a secondary listing in Johannesburg, posted a rise in third-quarter lager volumes, boosted by a strong performance in Asia, Africa and Latin America.

15 February, 2012