It seems beer drinking is on the nose as the world’s biggest beer maker suffers its first profit decline in its decade-long history.
Stock prices for the world’s largest brewer Anheuser-Busch InBev fell as much as 3.3 per cent as the company’s fourth-quarter results missed estimates at almost all levels with the Belgium-based beer maker continuing to struggle with a slump in its key market of Brazil.
It’s “another shocker, but that’s the trough,” wrote Eamonn Ferry, an analyst at Exane BNP Paribas told the Denver Post. “We had feared the worst this quarter, and so it is. There may well be an element of kitchen-sinking here.”
Spending power in Brazil, AB InBev’s largest market after the U.S., is nosediving amid record rates of unemployment, leading to a decline in AB InBev’s market share and a 33 per cent drop in earnings in that country.
The maker of well-known brands such as Stella Artois and Budweiser maintained its final dividend at 2 euros a share and warned that growth in such payments will be modest as it tries to curtail its $USD108 billion debt.
As the Wall Street Journal has noted, “a stale beer market leaves the investment case for Anheuser-Busch InBev, which brews seven of the top 10 global brands, heavily reliant on cost savings. Yet reviving interest in the drink is crucial in the long run.”