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Zimbabwe’s Delta Corporation boosts SABMiller’s strong volumes

SABMiller, the world's second-biggest brewer by volume after Anheuser-Busch InBev NV (ABI.BT), benefited from a strong performance in Asia and Africa, where socio-economic improvement, rising incomes and a thirst for Western lifestyles are fuelling consumption. That helped offset sluggish growth in more mature markets which are suffering from a cutback in consumer spending, high unemployment levels and a saturated marketplace.

Sales, excluding acquisitions and disposals, rose 7% in the first three months of the fiscal year on a constant currency basis, boosted by price increases and more purchases of higher-priced products. Sales per hectoliter were up 2%.

Lager and soft drinks volumes rose 5%, compared with a 1% drop a year earlier.

Zimbabwe's lager volumes grew 28% on an organic basis following capacity upgrades in the prior year. Castel delivered lager volume growth of 9%. Soft drinks volumes grew by 9% on an organic basis with solid performances in Ghana and Zimbabwe, and from our associate Castel.

SABMiller restarted reporting the results of its Zimbabwe associate, Delta Corporation Limited with effect from April 1 2010. SABMiller had stopped including Zimbabwe results in 2006 because of the country's deteriorating economy.

SABMiller resumed reporting due to "the effective 'dollarisation' of the economy in 2009, the end of hyperinflation and the stabilisation of the Zimbabwean economy.

"All credit goes to the Delta management team, whose efforts in keeping the business running in the last few years have been little short of heroic," said Mark Bowman, managing director of SABMiller Africa when he announced the resumption of reporting Zimbabwe results.

Delta, in which SABMiller Africa now holds a 36 percent interest, is a significant contributor to SABMiller's Africa operations.

Its key lager brands include Castle Lager, Eagle, Lion Lager, Carling Black Label, Golden Pilsener and Bohlinger's.

Its soft drinks portfolio includes a range of Coca-Cola brands and it also manufactures Chibuku, the market leader in the traditional sorghum beer category.

SABMiller, the world's largest brewer, said on Thursday that sales improved in the first half of its financial year thanks largely to strong gains in developing countries. In a trading update for the first quarter ended 30 June 2011, the company said on an organic basis, both lager and soft drinks volumes grew by 5%.

SABMiller is one of the world's largest brewers with brewing interests and distribution agreements across six continents.

The group's wide portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the world's largest bottlers of Coca-Cola products.

In the year ended March 31 2010, the group reported US$3 803 million adjusted pre-tax profit and group revenue of US$26 350 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.

25 Jul. 2011

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