BELGIUM: A-B InBev profits up, beats expectations in Q1
Operating profits beat analysts' forecasts to reach US$2.79bn for the three months to the end of March, A-B InBev said today (7 May). The rise compares to an estimated $2.5bn in the same period of last year, based on a combination of Anheuser-Busch and InBev earnings, the group said.
Net profits for the three months to the end of March reached US$783m, compared to $398m for InBev in the same period of 2008.
Like-for-like sales rose by 4.7% to $8.2bn for the quarter, although fell on a reported basis, from $8.85bn for InBev and A-B combined in the same quarter of 2008, said the firm, which also announced today that it has sold its South Korean Oriental Brewery to private equity group KKR for US$1.8bn.
Analysts reacted positively to A-B InBev's results. Sanford Bernstein analyst Trevor Stirling said that the brewer "beat even our positive expectations" in both sales and profits.
A-B InBev CFO Felipe Dutra said: "The first quarter of 2009 was a promising start to the year: consolidated volumes grew 0.9%, our Focus Brands delivered 3.5% volume growth, and we gained market share in seven key markets."
Group organic volumes rose by 0.9% for the quarter, driven by a 7.6% rise in Latin America. Volume sales also crept up by 0.1% in North America, although slipped by 8.3% and 5.1% in Western and Eastern Europe respectively.
Synergies from InBev's $52bn takeover of Anheuser late last year have continued apace in the first quarter.
A-B InBev CEO Carlos Brito said: "We are moving quickly to capture our synergy goals and achieved US$295m of synergies in Q1."
The brewer expects total synergies from the deal to reach $2.25bn and said today that $1bn of this will be delivered by savings in the A-B US division in 2009.
Capital expenditure will be reduced by at least $1bn in 2009, compared to combined spend for InBev and A-B in 2008, the group said.
In its outlook for the year, the firm said that it does not expect operating profits growth in the first quarter to be "an indicator of our results for the remainder of 2009".
It added: "The overall environment remains challenging, we project full-year cost of sales per hectolitre to remain up in the low single-digits, and comparisons become increasingly difficult.
"That said, we expect to deliver on our synergy and cash flow generation goals, while at the same time driving Focus Brand growth through sales and marketing programmes that combine discipline and efficiency with innovation."
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