SABMiller on Thursday reported double-digit sales growth in SA for the third quarter, as the scorching heat made most South Africans feel parched for days on end.
The brewer, which is soon to be taken over by Anheuser-Busch InBev (AB InBev) in a $103bn deal, said sales jumped 16%.
South Africans showed a thirst for the group’s soft drinks, which include Fanta, Coke, Twist, Minute Maid and Valpre water, when temperatures rocketed to highs of above 40°C in many areas.
Volume growth in its soft drinks portfolio, run by Amalgamated Beverages Industries, Africa’s largest bottler of Coca-Cola products, leaped 21%.
"The warm dry weather in SA (was) conducive to people drinking more beer and beverages," SABMiller spokesman Richard Farnsworth said.
However, growth in its lager volumes was more muted. Lager sales only rose 2% during the third quarter on demand for Castle Lager, Castle Light and Redd’s. The Hansa Pilsener brand did not fare as well.
At group level, SABMiller was also affected by global market volatility and the rout in emerging market currencies.
The dollar’s surge against currencies in emerging markets in which SABMiller operates resulted in net producer revenue declining 8%. The company derives the bulk of its earnings from markets such as China, SA, Colombia, Poland and Nigeria, all countries in which it has an unmatched footprint.
"Our reported results (were) materially impacted by the significant depreciation of our key operating currencies against the US dollar," SABMiller CEO Alan Clark said.
Brazil’s real and the rand were the two worst performers against the dollar last year, slumping 30% and 25% respectively.
Barring currency translations, Mr Clark described the quarter as strong with the group reporting a volume growth (in constant currency) of 4% and group growth of 7% in net producer revenue.
Gryphon Asset Management’s Ruben Beelders agreed. "I would certainly agree with management. If you look at their volume growth, there is certainly an improving trend. Right now, their biggest problem is their exposure to emerging markets.
On a constant currency basis their earnings are good but when translated to dollars, they are poor," Mr Beelders said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.