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SABMiller profits lose fizz as merger costs weigh

South African brewer takes hit from African problems and costs of AB Inbev tie-up
SABMiller profits lose fizz as merger costs weigh
Group beverage volumes rose 2%, with lager volumes up 1% and soft drink volumes up 6%

Profits at SABMiller plc (LON:SAB) fell as costs rose ahead of its tie-up with rival Stella Artois maker Anheuser-Busch InBev SA (EBR:ABI).

The Peroni Nastro Azzurro brewer said pre-tax profit in the year to the end of March dropped 16% to US$4.1bn.

It took a US$572 million charge for reducing operations in Angola and war-torn South Sudan and a US$160mln hit from the AB InBev deal.

But group beverage volumes rose 2%, with lager volumes up 1% and soft drink volumes up 6%.

Reported pre-tax earnings before interest and amortisation fell 9% to US$5.8bn.

It said growth accelerated in the year, driven by improving momentum in Latin America, continued strong and well-balanced momentum in Africa and improvements in Australia and Europe in the second half.

Chief executive Alan Clark said: “We are expanding our exposure to growing markets and building the optimum portfolio of lager, soft drinks and other alcoholic beverages to capture growth.”

Shares rose 19.5p to 4229.5p in early London trading.

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