AB Inbev Tiptoes Into Second Half Of 2009 – US-FOREX.US
There’s no reason to get excited yet. Anheuser-Busch InBev, the brewer of Stella Artois and Budweiser, said on Thursday profits grew 28% in the second quarter but warned that it will come under significant pressure in the second half of the year as beer volumes drop.Shares of AB InBev
, which have more than doubled since a November low, fell 4.7%, or 1.43 euros , to 27.46 euros in Brussels during morning trading on Thursday after the company’s chief executive acknowledged “challenges” ahead.”We have strong operating momentum going into the second half of 2009, but recognize that many challenges remain. The beer industry, while resilient in most of our key markets, is not immune to economic pressures,” Chief Executive Carlos Brito said.Brewers have been badly hit by a fall in consumer spending, customers switching to other drinks such as wine, and people trading down to cheaper brands from premium ones.
The brewer of Beck’s beer said earnings before interest, tax, depreciation and amortization, or ebitda, rose 18.5% to 3.6 billion, compared with the average 3.2 billion in a Reuters poll of 15 analysts. Overall cost of sales decreased by 5.6% in the second quarter, thanks to brewery productivity enhancements, the company said.Analysts are forecasting a mixed picture for the rest of 2009. Sales in the U.S. are expected to become slightly weaker in the third quarter as Bud Light Lime added an extraordinary 2% in sales in the same quarter last year. On the other hand, sales are expected to improve in Brazil and in Western Europe as Germany and France have apparently emerged out of the recession and the rate at which other economies are shrinking has slowed.
AB InBev reiterated its goal of bringing in merger savings of 1 billion in 2009, and said the second quarter had yielded 315 million, bringing the total for the first half of 2009 to 610 million. The company became the world’s largest brewer last year when InBev took over Anheuser-Busch for 52.0 billion.
Thomson Reuters contributed to this article.