SABMiller tops up profit

By David Jones

LONDON (Reuters) - SABMiller, the world's biggest brewer, beat forecasts with a 19 percent rise in annual earnings on Thursday and said it expects to raise beer prices to offset soaring commodity costs, sending its shares higher.

The London-based maker of Miller Lite, Peroni and Pilsner Urquell beers was positive for its outlook, saying most of its worldwide operations were in the high-growth developing economy markets of Latin America, Asia and Africa.

Chief Executive Graham Mackay said the group had held its operating profit margins despite sharp rises in barley, hops, packaging and energy, and was confident it will do so again.

"We are seeking to recover the absolute cost increases with beer price rises in the current year," Mackay told a conference call following annual results.

SABMiller shares rose 5.2 percent to 12.66 pounds by 9:30 a.m. in a lower London stock market, as the group held its annual EBITA (earnings before interest, tax and amortisation) margin level with the prior year at 17.4 percent.

The group, which bought Dutch brewer Grolsch in February and is waiting for approval to combine its U.S. operations with Molson Coors posted adjusted earnings per share of 143.1 U.S. cents for the year to March 31, against analyst forecasts of 134.1 to 142.1 cents and a consensus of 137.8 cents.

"We see the outlook statement as reassuring. The key point is SABMiller's continuing confidence that it can fully offset these cost increases through price and mix improvements," said Cazenove analyst Matthew Webb.

He raised his provisional earnings forecast for the year to March 2009 by 5 percent to 162 cents.