BELGIUM: Debt to rise, earnings hit warns InBev
InBev has issued a statement today (3 March) highlighting a rise in debt and an impact on earnings per share this year.
"During the presentation of InBev's 2004 results yesterday," the statement said, "several factors were highlighted, which will impact below EBIT, and which have previously been disclosed to investors.
Importantly, none of these factors will impact operational performance, but it is expected they will have a material impact on InBev's 2005 earnings per share.
In order to more fully respond to questions from analysts and investors, InBev wishes to provide the following additional clarifications concerning these factors:
- Average outstanding financial debt is expected to increase, following the earlier announced acquisitions in China, Germany and Eastern Europe; that combined with higher interest rates, will likely reduce EPS by 5-7%;
- While InBev will not speculate on the outcome of the MTO, a 100% take-up in shares would result in EPS dilution of 4-5%, while a 100% selection of cash, would be broadly neutral;
- As mentioned in the board report, the total contribution to InBev, brought about by the unwinding of the FEMSA relationship, will be reduced by about €80m (Approximately €35m of this will impact the above-EBIT line, and this will be offset by the synergies and operational improvements of our US business);
- InBev expects solid organic growth in 2005, based upon its strategy of top line growth and strong cost management. Nevertheless, it is unlikely that 2005 EPS will be as high as normalised 2004 EPS."
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