SABMiller's Q1 beer volumes dip, share price sinks

By David Jones

LONDON (Reuters) - Brewing giant SABMiller Plc (SAB.L) reported a below-forecast 1.6 percent fall in first-quarter underlying beer volumes and warned of challenging trading in South Africa, sending its shares lower.

Analysts had expected beer volumes for the April-June first quarter to show between growth of 3.5 percent and a fall of 1.0 percent, with the average forecast in a Reuters poll of analysts pointing to growth of around 1.3 percent.

Shares in the London-based maker of Miller Lite, Peroni and Pilsner Urquell fell 3.4 percent to 10.66 pounds by 1135 GMT after trading around 10.90 pounds before the trading update.

The brewer reported a 7 percent rise in underlying volumes for its financial year to end-March 2008, but analysts had expected slower growth in the first quarter as beer price rises hit volume growth and it faced tough comparative figures.

SABMiller is the world's largest brewer by beer volume, but will lose that crown when InBev's INTB.BR deal to buy Anheuser-Busch (BUD.N) is completed later this year.

Analyst Matthew Webb at Cazenove says he expects to trim his earnings forecasts by around two percent to reflect conditions in South Africa and says the shares trade on 13.1 times his 2009 earnings forecast, against the brewing sector's 12.3 times.

"We believe that SABMiller's organic growth rate will be below the rest of the sector in the short term, which makes it hard to argue for an immediate expansion of this premium."

In South Africa, its biggest profit centre with 28 percent of earnings, beer volumes fell 3 percent reflecting the loss of its Amstel licence in March 2007 and softer consumer demand due to higher interest rates and increasing food and energy costs.