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The
maker of Budweiser, Corona and Stella Artois also cut its
guidance for full-year revenue growth after sales declined for a
fourth straight quarter in its second-largest market.
The brewer said on Friday that volumes in Brazil, where it has
two thirds of the market, dropped by 4.1 percent in the July to
September period, its fourth straight quarter of decline and
bringing the drop in the year to date to 6.4 percent.
"Most of our markets delivered solid results. However, these
results were negatively impacted by a very weak quarter in
Brazil," financial director Felipe Dutra said.
The performance in Brazil was the result of a tough consumer
environment and comparison with good results a year earlier, the
company said.
It added that problems were compounded by a shift of price rises
to the fourth quarter, from the third quarter of 2015, and a hit
from foreign currency hedges.
Consequently, the Belgium-based brewer no longer expects 2016
revenue in Brazil to be flat and it cut its overall guidance for
net revenue per hectoliter to growth in line with inflation from
a previous above-inflation forecast.
SHARES SLIDE
Shares in the group were down 4.4 percent at 107.15 euros by
0440 ET, among the weakest performers on the FTSEurofirst 300
index <.FTEU3> of leading European blue-chips and dragging down
the food and beverage index <.SX3P>.
Bernstein Securities said it was the weakest set of AB InBev
results it could remember.
"Some of these items will reverse, but this is more than just a
temporary issue," said beverage analyst Trevor Stirling.
The weakness in Brazil and a flat U.S. market highlight the
company's need for new markets with high growth potential. Its
takeover of SABMiller adds countries in Latin America, such as
Colombia and Peru, and takes it into Africa for the first time.
Mexico was the company's bright spot, with beer sales up 9.6
percent, though there too foreign exchange hedges and investment
in brands reduced profit margins.
Core profit in the third quarter fell by 2 percent to $4.03
billion, the company said, below the average forecast of $4.43
billion in a Reuters poll. It was the first like-for-like
decline since AB InBev was formed through InBev's acquisition of
Anheuser-Busch in 2008.
The company extended its global market leadership by buying
nearest rival SABMiller for 79 billion pounds ($96.2 billion)
this month, but the group's third-quarter results are purely for
the pre-takeover group.
AB InBev also announced that it would pay an interim dividend of
1.60 euros per share, the same as in 2015, seen as positive by
analysts.
($1 = 0.8213 pounds)
(Editing by Robert-Jan Bartunek and David Goodman)
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