BELGIUM: InBev Q3 volumes to rise, profits to contract - forecast
InBev has warned that it expects the "slight contraction" in its EBITDA margin experienced in the first half of this year to continue into its third quarter.
In a trading update, issued today (3 October), the brewer also said that both total and own beer volumes in the three months to the end of September should rise in the low single digit percentage range.
Operating conditions across InBev's major markets in the third quarter should remain "in line" with the second quarter of 2008, the company said, with signs of improvement in some markets. "We expect that North America, Latin America North, Latin America South and Asia Pacific will report growth in total volumes, while in Western Europe and Central and Eastern Europe, small declines in volumes are expected to occur," the company said.
In Western Europe, InBev said it believed own beer volumes should rise slightly in the period, despite a slide in total volumes. "This is attributable to our strategy of reducing third party subcontracted volumes and commercial products." Continued volume reductions in Russia and Ukraine, meanwhile are holding back volumes in Central and Eastern Europe, where "the enhanced focus to grow the share of higher margin and premium brands has not yet fully offset the decline in the more affordable brands".
In value terms, InBev said sales in the quarter should grow in the high single digit percentage range." We remain committed to achieving revenue growth in excess of volume growth," InBev said.
While Latin America South has been tipped to deliver the strongest performance of all InBev's zones for the quarter, the brewer warned that volumes in Russia will slip in the period, while volumes in China will "most likely remain flat".
The forecast was based on InBev's performance in July and August.
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