[Stay on top of transportation news: Get TTNews in your inbox.]
Anheuser-Busch InBev Reports Unexpected Rise in Beer Demand
Demand in Region That Includes Mexico Offsets Sluggishness in U.S., China
Anheuser-Busch InBev volumes unexpectedly increased as robust demand for beer in the region that includes Mexico offset sluggishness in the U.S. and China.
The world’s largest brewer reported a 0.8% rise in organic volume growth in the first quarter, with beer up by 1.2% according to a statement May 5. Analysts had expected a 0.3% drop.
Shares in AB InBev gained as much as 6.8% in early trading, adding to a more than 14% rise over the past 12 months.
“This is a high-quality print,” Edward Mundy and Sebastian Hickman, analysts at Jefferies, wrote in a note. They cited beats across volumes, revenue and Ebitda.
Strong beer demand in Mexico, Colombia and Peru drove volumes in the region up 4.8% in the period, offsetting a 3.1% decline in North America and a 0.4% drop in the region that includes China, amid a broad-based reduction in drinking. Revenue also rose in no-alcohol beer and in the non-beer segment.
Producers of alcoholic drinks have been grappling with a consumer pullback due to concerns about cost and negative health impacts. AB InBev is seeking to diversify its portfolio with its growing non-beer category, which includes ready-to-drink beverages, or RTDs.
While rival beer makers Heineken NV and Carlsberg A/S have warned the conflict in Middle East has raised the cost of energy and raw materials, Citigroup Inc. analyst Simon Hales said AB InBev is less exposed due to its skew to the Americas.
The Belgium-based company maintained its medium-term outlook of growth in earnings before interest, tax, depreciation and amortization of between 4% and 8%.
Anheuser-Busch Cos. ranks No. 12 on the Transport Topics list of top beverage carriers.
