SABMiller sees second-half boost

By David Jones

LONDON (Reuters) - World No. 2 brewer SABMiller Plc (SAB.L) expects a second-half boost from currency movements and a fall in the cost of inputs such as barley after price rises and cost cuts pushed up its first-half profits.

The London-based brewer of Miller Lite, Peroni and Grolsch beers said on Thursday it expected raw material costs to begin to ease towards the end of this year, while its second half should also benefit from foreign exchange rate movements.

The brewer's first-half profit increased 6 percent, beating analysts' average forecast, as beer price rises and cost savings helped offset a 1 percent fall in underlying volumes.

Chief Executive Graham Mackay said trading was likely to remain difficult, with unemployment rising and retail spending depressed, but it should see a substantial benefit from currency in its second half and some unwinding of commodity contracts.

"Trading conditions will not change much in the second half, with only perhaps a slightly firmer undertone," Mackay told Reuters in an interview after the half-year results.

The brewer reported adjusted earnings per share of 80 U.S. cents for the six months to end-September, compared with average forecasts of 71 cents, according to Thomson Reuters I/B/E/S, while the half-year dividend rose 6 percent to 17 cents a share.

"An outstanding set of H1 results from SABMiller, 17 percent ahead of our forecast at the EPS level ... We expect the shares to go higher today despite their recent strong run," said analyst Matthew Webb at brokers Cazenove.

He said he was provisionally upgrading his earnings forecast for the current year to March 2010 and March 2011 by 6 percent as he said the group was navigating the recession very successfully.