Anheuser-Busch InBev (AB InBev) reported forecast-beating core profit for the second quarter on Thursday as cost cuts offset weaker sales.
The world’s largest brewery by volume reported a 10.2% rise in second-quarter normalised core profit (EBITDA), surpassing analysts’ expected growth of 8.3%.
While revenue and volumes fell short of forecasts, analysts said that the maker of Budweiser and Stella Artois had delivered solid performance against generally weak results for peers like Heineken.
The beer giant’s shares gained 1.75% but remain 5% lower than at the start of the year.
Shares of Heineken – the world’s second largest brewer – fell more than 9% on Monday after the company said an anticipated sales boost had not materialised due to bad weather.
'We Remain Focused'
The chief executive of AB InBev Michel Doukeris said, “We are encouraged with our performance in the first half of the year and remain focused on consistent execution of our strategy.”
AB InBev’s strategy includes driving new growth via zero-alcohol brews and on-beer products like canned cocktails, selling more via digital channels and enhancing efficiency throughout its business.
Following the Covid-19 pandemic in 2020, all brewers faced a steep rise in input costs from barley to aluminium.
However, profit margins are now set for expansion as cost pressures ease.
In the United States, AB InBev experienced y a prolonged customer boycott of key brand Bud Light, the impact of which is now fading.
The brewer maintained its full-year guidance on Thursday.
This move surprised Siphelele Mdudu, an investment analyst at AB InBev investor Matrix Fund Managers.
Mdudu thought the company could raise the forecast given its “outstanding” performance.
In China, bad weather affected AB InBev, which drove down revenue and volumes by 15.2% and 10.4%, respectively.
In Argentina, a surge in inflation has put pressure on consumers and beer sales.
Volumes declined by more than 20% in the second quarter.
The company also saw its revenue fall 0.6% in the key US market, where the boycott of Bud Light knocked the brewer from its top spot as the nation’s best-selling beer last year.
Mdudu, however, welcomed a significant rise in US profits, which AB InBev said was down to productivity initiatives and cuts to sales, general and administrative expenses.
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