BELGIUM/US: Anheuser-Busch InBev H1 profits dented by transport costs

• H1 net profits leap 34% to US$3.65bn
• Net sales up 1.3% to US$19.2bn
• Operating profits slip 0.13% to US$7.15bn
• Q2 volumes "soft" due to US shipping pattern adjustments 

Anheuser-Busch has reported a slight drop in H1 profits as "soft" volumes in Q2 and higher transport costs in the US and Brazil affected its performance. 

Net profits jumped by 34% to US$3.65bn in the first six months to the end of June, the Belgium brewer announced today (31 July). But core operating profits slipped by 0.13% to US$7.15bn. Net sales increased by 1.3%.

Volumes in the US and Western Europe declined in the first half of the year, however global volumes rose by 1% driven by growth in Brazil (3.4%) and China (5.9%) over the same period.

Second-quarter volumes were described as “soft” because of adjustments to shipping patterns in the US that saw a drop in shipments to wholesalers. But A-B InBev remained upbeat for the country. The brewer has about 50% of the beer market in the US, mostly through its Budweiser brand.

“We are encouraged by current trends [in the US], with the first six months of the year seeing the best industry performance since 2008. This has been due to favourable weather and an improvement in the economy, especially in the first quarter, as well as industry innovations throughout the year,” it said in a statement.

The company put its weight behind new products such as Bud Lite Platinum this year and saw marketing costs rise by 9.1% in H1.

However Q2 profits slid 4% to US$3.59bn, while sales grew slightly to US$19.2bn. 

A-B InBev continued to be encouraged by its performance in Brazil, where it has about 70% of the market. Strong growth in the second quarter was driven by the on-trade and new package innovations, it said.

“Our three national brands continue to perform well and we are committed to further enhancing consumer preference for these brands while pursuing regional market share opportunities,” the company said.

Looking head, A-B InBev said it expected growth in the US over the next two quarters as a result of the adjustments to its shipping patterns. A better balance between volume and price will help boost volume growth in Brazil, it added.

Shares in A-B InBev were down 3.94% this morning at EUR63.67 on the Brussels Stock Exchange. 

To read just-drinks' coverage of A-B InBev's H1 conference call, click here.

To find out analysts' reaction to the company's performance, click here.

To read the company's official statement, click here.