A-B InBev has improved distribution of Bud Light Platinum

Anheuser-Busch InBev's (A-B InBev) profits were weaker than expected, but analysts expect performance to bounce back as favourable underlying beer trends in the US shine through.

The Budweiser brewer announced a slight dip in operating profit for the six months up to June and marginal rises in quarterly volumes earlier today (31 July). But analysts Bernstein Research said factors that bit into first-half results will turn around before the end of the year.

Falls in shipments to US wholesalers will narrow as planned adjustments to shipping patterns take effect, the analysts said. High distribution costs for new products such as Bud Light Platinum and Bud Light Lime-A-Rita should fall as more breweries produce the lines, Bernstein said in a note.

This should allow A-B InBev's strong price mix in the US, boosted by its focus on premium beer, to drive profits back onto expectations by the year end, it said.  

UBS Investment Research said A-B InBev's Latin American unit, AmBev, is predicting improved sales mix in Brazil for the next two quarters after changing its estimate for the year from “in line with inflation” to “at least in line with inflation”. UBS expects revenue per hectolitre growth of 5% for this year compared to 1% last year.

A-B InBev, which has a 70% market share in Brazil, saw H1 volumes in the country grow by 3.4% and Q2 volumes rise by 2.8%. AmBev also released its H1 and Q2 results today.

Meanwhile, the analysts blamed poor performance in Europe on bad weather and unfavourable comparisons.

However, Bernstein said a volumes drop in Russia of 9.5% in the first half of the year was down to share loss as beer industry shipments in the country remained flat.