Belgian brewer Anheuser-Busch InBev, known as AB InBev (BUD,AHBIF.PK) Tuesday reported a higher first-quarter profit, reflecting a gain linked to hedging of share based payment programs, lower net finance costs and a decline in effective tax rate. Revenues dropped and Focus Brands volumes were down 2.9 percent from last year. However, the company said it is confident of the long term potential of its brands.
The firm stated that its volumes came under pressure in the first quarter and total volumes declined 4.1 percent, with own beer volumes declining 4.0 percent and 4.8 percent drop in non-beer volumes.
Beer volumes in Brazil fell 8.2 percent, reflecting earlier timing of Carnival, poorer weather, weakened disposable income growth and high food inflation. In the U.S., beer sales-to-wholesalers declined 5.2 percent, with 4.1 percent drop in selling-day adjusted sales-to-retailers, the company said.
Meanwhile, volumes in China climbed 15.5 percent, with strong performances by the firm's national brands, Budweiser and Harbin, together with successful Chinese New Year campaigns.
In the first quarter, profit attributable to equity holders of AB InBev rose to $2.05 billion from $1.67 billion in the previous year. On a per share basis, earnings were $1.28, up from $1.04 per share a year earlier.
The company attributed the increase to other financial results of $295 million, which include a gain of $402 million linked to the hedging of share based payment programs.
Excluding items, normalized profit attributable to equity holders of the company increased to $1.85 billion from $1.65 billion, amid lower net finance costs and a lower effective tax rate. Normalized earnings per share was $1.16, while the company posted $1.03 per share last year.
On average, 4 analysts polled by Thomson Reuters expected earnings of $0.94 per share for the quarter. Analysts' estimates typically exclude special items.
Normalized EBITDA was $3.43 billion, compared to $3.56 billion in the prior year.
Revenues for the quarter dropped to $9.17 billion from $9.33 billion in the same quarter last year. Analysts expected revenues of $9.57 billion.
Organic growth was 1.5 percent with strong revenue per hl growth of 5.8 percent, driven by management initiatives and the benefit of premiumization of portfolio. On a constant geographic basis, revenue per hl grew by 6.9 percent.
Other operating income climbed 73.4 percent to $193 million, mainly due to higher government incentives linked to investments in Brazil.
The company revised its outlook for volume growth in Brazil and now expects that beer industry volumes in fiscal 2013 will be either flat or down low single-digits compared to the prior year.
In Brussels, the shares are currently trading at 71.04 euros, down 2.82 percent. On the NYSE, the shares ended on Monday at $95.48.
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