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AB InBev Sees Only 'Moderate' 2019 Profit Growth After Weak Q3

Published on Oct 25 2019 8:20 AM in Drinks tagged: Featured Post / Trending Posts / AB Inbev / Budweiser / Stella Artois / Corona / Third Quarter Report

AB InBev Sees Only 'Moderate' 2019 Profit Growth After Weak Q3

Anheuser-Busch InBev, the world's largest beer maker, reported lower-than-expected profit in the third quarter and said it now only expected moderate profit growth in 2019 due to challenges in the second half of the year.

The maker of Budweiser, Corona and Stella Artois said on Friday that its core profit (EBITDA) was unchanged year-on-year, below market expectations of a 3% increase.

AB InBev had cautioned about some weakness after a strong second quarter when the company's beer sales rose at their fastest pace in over five years.

'Challenging' Quarter

The company described its results in the July-September period as "challenging" and said this was the result of three anticipated factors.

Shipping of beer into China had been disproportionately higher in the second quarter because of promotions, and so they were lower in the third. Costs had risen because of higher commodity costs and the weaker currencies of some of its markets.

Sales and marketing costs were also higher than in the third quarter of 2018. Last year, such costs were skewed more into the first half of the year because of the soccer World Cup.

The company had previously said it expected strong growth of revenue and core profit in 2019.

Outlook

On Friday, it continued to expect strong revenue growth. However, drives to push affordable lagers would mean that revenue per litre growth would be slightly behind inflation though total costs would also grow at a rate below inflation.

"We now expect moderate EBITDA growth in FY19 given the additional headwinds faced in [Q3] which we anticipate will continue into [Q4]," AB InBev said.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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