BELGIUM: A-B InBev profits up on weak beer markets

Anheuser-Busch InBev has reported a rise in full-year profits, but the brewing giant echoed rivals by warning that beer markets are expected to remain weak in 2010.

Underlying profits (EBITDA) rose by 16.6% to US$13bn for the 12 months to the end of December, compared to equivalent combined earnings of $12bn for the separate InBev and A-B businesses in 2008, said A-B InBev today (4 March).

Price rises masked weak beer volume sales to help the Stella Artois and Budweiser brewer to increase like-for-like net sales by 2.5% in 2009, to $36.75bn.
  
Like-for-like beer volumes fell by 1% for the year, as consumers cut back in the economic downturn, accentuating longer term stagnation in western markets in particular.

A-B InBev beer markets will remain weak in 2010 and the first six months of the year will be the most challenging, mainly due to unemployment in the US and a tax hike on beer in Russia.

"We expect to show solid operating performance in 2010, but we expect quarter-over-quarter results to strongly skew toward the second half of the year," said the group, adding that it also faces tough cost comparisons against the first half of 2008.

At the same time, there will be less opportunity for price rises. Sales per hectolitre are expected to run flat or increase in low single digits over 2010, said the brewer.

But, synergies and cost cutting should result in higher EBITDA for the year, it said.
 
The group said that the InBev acquisition of A-B for $52bn in late 2008 is "essentially complete", following its deal to refinance debt last month.

Separately, the brewer is facing Europe-wide action by a coalition of trade unions, upset at the firm's plan to cut 10% of its workforce in Western Europe.

For the full announcement, click here.