Analysis - Brazil bounces back for Anheuser-Busch InBev
A-B InBev released its H1 results yesterday
Anheuser-Busch InBev's second-quarter results show that Brazil's beer market has come back on track sooner than expected, analysts have said.
The brewer yesterday (31 July) posted a 0.4% drop in beer volumes for Q2 while beer sales-per-hectolitre grew by 10% in the three months to the end of June. The numbers represent a marked improvement on Q1 results, when beer volumes dropped by 8.2%.
Stifel analyst Mark Swartzberg admitted today that he was “surprised” by the bounce back and expects A-B InBev's Brazilian subsidiary, AmBev, to raise beer prices in October.
“We understand too that, although June was better than July, both months were positive and much better than the down-mid to high single-digits of January-through-April,” Swartzberg said.
Nomura's Ian Shackleton said that better weather was behind Brazil's improvement, while last month's Confederations Cup added around 1% to the country's beer volumes. Yesterday, CEO Carlos Brito told analysts that the football tournament lifted Brazil's volumes by 300,000 hectolitres and was a useful “dress rehearsal” for next summer's World Cup, which he expects to add around 1.2m hectolitres to A-B InBev's volumes.
Shackleton also said thateconomic headwinds in Brazil appear to be softening and the easing of food inflation is having a “positive impact” on disposable income.
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