BELGIUM: Anheuser-Busch InBev's volumes recover, H1 profits up

• First-half net profits fall 6.4% to US$3.4bn
• H1 net sales up 2.9% to $19.8bn
• Operating profits in H1 rise 2.4% to $7.3bn
• Q2 global group volumes fall 1.2%, compared to 4% Q1 drop

Anheuser-Busch InBev has welcomed an improvement in its second-quarter performance in Brazil as it reported a rise in H1 group sales and operating profits. 

Net profits fell by 6.4% to US$3.4bn in the six months months to the end of June, the brewer said today (31 July). Net sales climbed by 2.9% to $19.8bn over the same period while operating profits increased by 2.4% to $7.3bn.

Net profits also fell in Q2, by 22% to $1.5m, with A-B InBev blaming higher finance costs and income tax expenses. EBITDA in Q2 increased by 5.8% to $3.9m.

Total volumes for the first half fell by 2.6% organically but second-quarter volumes were down just 1.2% compared to 4% in Q1. 

There was also a second-quarter fight back in Brazil, where volumes dropped by 0.4%. A-B InBev hailed the mainly flat performance as a marked improvement on Q1, when bad weather hit volumes by 8.2%. 

The company said it had revised its strategy in the country after the weak Q1 and also benefited from better weather and the Confederations Cup football tournament.

However, some analysts expect Brazil to bring down A-B InBev's full-year results and the company admitted that pressure on incomes in Brazil to likely continue throughout the year and volumes are will finish flat or down on last year.

The group's first-half volumes were down in many markets, including North America (-3.4%), Western Europe (-7.1%) and Central & Eastern Europe (-10.1). Russia volumes dropped by 10.6% “as sales, marketing and distribution restrictions led to a weak industry performance”, A-B InBev said.

In the US, the company said price increases and a move towards a premiumisation strategy will continue to boost sales despite volumes loses. In China, where volumes climbed by 5% in Q2, “solid” industry volume growth should continue alongside consumers trading up to A-B InBev's premium brands Harbin, Harbin Ice and Budweiser, the brewer said. This trend helped the company post a 7.4% increase in sales-per-hectolitre in the country in the second quarter, it said.

Today's results included some of Grupo Modelo's second-quarter performance after A-B InBev completed its acquisition of the Mexican brewer last month. 

Shares in A-B InBev were up 7.27% at EUR72.62 at 11:10 CET.

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