Budweiser maker AB InBev reports lower 4Q profit
AMSTERDAM (AP) — Anheuser-Busch InBev NV, the world's largest brewer, says its profits fell 4.9 percent in the fourth quarter, due to changes in financing costs.
Net profit was $1.76 billion (€1.35 billion), down from $1.85 billion in the same period a year ago, as exchange rate-linked losses in the fourth quarter of 2012 and gains on derivatives in the fourth quarter of 2011 caused a combined $400 million downward swing.
Revenues rose 8.8 percent to $10.3 billion, due to price hikes, and operating profit rose 10.7 percent, thanks to cost-cutting, the company said.
The Leuven, Belgium-based maker of Budweiser, Bud Light, Stella Artois and Beck's said it expects weak first quarter volumes in the United States, its most profitable market, as consumers there have less disposable income and weather is worse than a year ago.
But the company said that volumes had grown in the U.S. in 2012 for the first time since 2008 and "market share is showing signs of stabilizing."
InBev also expects "softness" in Brazil, where it has a 68.5 percent market share with brands Skol, Brahma and Antarctica, due to an early carnival and wet weather.
Volumes in China, the company's third-largest market, grew 1.9 percent and gained market share in the fourth quarter, with Budweiser the best-selling "premium" beer in the country. InBev expects better growth in China this year.
More than half of Budweiser sales now take place outside the U.S., the company said.
InBev didn't outline whether it expects to increase profits in 2013, saying only it expects its revenue per gallon sold to increase faster than the rate of inflation, and costs to rise "in the mid-single digits."
Shares fell 1.3 percent to €68.85 in early trading in Brussels.
AB InBev has been attempting since June to take over the half of Corona maker Grupo Modelo it doesn't already own for $20.1 billion, but the deal was challenged by the U.S. Department of Justice over concerns it would make the company too dominant in the U.S.
In response, InBev announced a side-deal this month to sell the rights to market Corona in the U.S. to smaller competitor Constellation Brands, hoping that would appease regulators. For now the deal "remains subject to the existing challenge," InBev said Wednesday.
The company's U.S. subsidiary, Anheuser-Busch of St. Louis, Missouri, is facing a lawsuit from consumers who on Tuesday accused it of watering down its beers, including Budweiser and Michelob, so that they carry a lower alcohol percentage than their label suggests.
"Our beers are in full compliance with all alcohol labeling laws. We proudly adhere to the highest standards in brewing our beers, which have made them the best-selling in the U.S. and the world," said Peter Kraemer, vice president of brewing and supply, in a statement.