KO Coca Cola Company

LONDON—SABMiller PLC on Thursday reported an 18% slide in first-half profit as the world's second-largest brewer was hammered by currency volatility and world-wide lager volumes were flat.

Brewers have seen consumers in developed markets flock to craft beer and other spirits, which has weakened demand for mainstream lagers. SABMiller, which has a strong footprint in Africa and Latin America, has benefited from stronger volume from these regions but continued to report lower volume in Europe and the U.S.

The London-based brewer posted pretax profit of $2.33 billion for the six months to Sept. 30, down from $2.83 billion the previous year. Adjusted per-share earnings of $1.10 were lower than the $1.23 reported a year earlier. Revenue fell 12% to $9.99 billion, but rose 5% at constant currency.

"Our reported results were again negatively impacted by the depreciation of major operating currencies against the U.S. dollar," said Chief Executive Alan Clark.

The company said foreign exchange movements had dragged down earnings before interest, taxes, depreciation and amortization by $497 million. Ebitda for the period was down 11% from a year earlier at $2.92 billion.

The results come a day after Anheuser-Busch NV agreed to buy SABMiller for $108 billion, a deal that is expected to close in the second half of next year.

The owner of the Grolsch and Peroni beer brands reported strong growth in Latin America and Africa at constant exchange rates, with net producer revenue—which strips out excise duties and other taxes—rising 8% and 9% respectively in those regions.

Soft drinks again showed more fizz than lager, with sales volume increasing 4% while lager volumes were flat, continuing a recent trend. SAB has expanded aggressively into nonalcoholic beverages in recent years, forming alliances with Coca-Cola Co. to bottle soda and releasing a range of malt-based drinks, mainly in West Africa.

A key question that hangs over the deal with AB InBev is whether the Belgian brewer can continue to bottle for PepsiCo Inc. while also bottling for Coke. AB InBev CEO Carlos Brito declined to comment on the issue on Wednesday, telling analysts that it was "too early to speculate."

Razak Musah Baba contributed to this article

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

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(END) Dow Jones Newswires

November 12, 2015 04:05 ET (09:05 GMT)

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