Core profit, or earnings before interest, taxes, depreciation and amortization, rose 0.9 percent to $3.43 billion, but was below even the lowest forecast in a Reuters poll of brokers. Anheuser-Busch also reported sales declines in every region except Asia, where China was exceptionally strong.
The company, which has a two-thirds share of the Brazilian beer market, said consumers there drank 8.2 percent less beer than a year ago because of the earlier timing of the Carnival, poor weather and high food inflation. It also lost market share.
“Brazil has been a great banker for years. It wobbled a bit last year. Now, it’s taken a further leg down,” said Andrew Holland, beverage analyst at Societe Generale.
The company, which makes Budweiser, Stella and Beck’s, missed first-quarter profit forecasts, and said that Brazilian sales volumes were likely to be flat or down by a low-single-digit percentage this year. It had previously forecast low- to mid-single digit growth there.
The world’s top brewers are relying on emerging markets for growth amid a prolonged squeeze on consumer incomes in austerity-hit Europe and limited expansion in the United States. But bad weather and tax-related price increases have posed challenges recently.
Felipe Dutra, the company’s chief financial officer, said the early Carnival in Brazil, which shortened the summer drinking season, and wet weather had been known factors. But March proved particularly weak, with industry volumes down by a percentage in the high teens.
“We had continued weak weather into March,” Mr. Dutra said. “But we also saw a peak in food inflation which impacts real disposable income.”
Brazilian inflation accelerated in March to 6.59 percent, breaching the official target ceiling of 6.5 percent for the first time since November 2011.
Article source: http://www.nytimes.com/2013/05/01/business/anheuser-busch-inbev-reports-a-small-profit-increase.html?partner=rss&emc=rss
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