Anheuser-Busch InBev ABI.BR, the world's largest brewer, has reported higher than expected second-quarter earnings as its Latin American consumers drank more and it pushed through higher prices globally.
The brewer of Budweiser, Corona and Stella Artois said core profit - earnings before interest, tax, depreciation and amortisation - rose 7.2% on a like-for-like basis, beating the 5.6% gain expected by analysts in a company-compiled poll.
The Belgium-based brewer repeated its forecast that core profit would rise by between 4% and 8% this year, with revenue rising faster than profit. AB InBev is facing higher costs for commodities and for beer deliveries, though much of it is already hedged.
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Chief executive Michel Doukeris said that, based on the picture today, costs for next year would not rise as steeply as in 2022. He also said there were no strong signals for now that high global inflation was impacting beer consumption.
"We always talk this idea that beer is an affordable luxury, especially premium beers. I think people are trading out or trading down much more in other categories at this moment than in beverage, than in beer. Beer remains very resilient," he told Reuters.
Despite the stronger operations, AB InBev's shares were down around 4% in early afternoon trading, although were still some 7% above the level they dropped to in June.
Broker Jefferies pointed to the company's failure to narrow its outlook, saying that it had expected more muted share price reaction if this resulted in no upgrades of analyst estimates for the year.
Trevor Stirling of Bernstein described the results as "solid" but said there were question marks as to why underlying earnings per share were actually below market expectations.
Gains were most pronounced for Brazil, Colombia, Mexico and its other Latin America markets, with consumption of beer and other drinks up by more than 8% and double-digit percentage increases of profits.
By contrast, volumes in North America and in its Europe, Middle East and Africa (EMEA) unit were slightly lower, although many consumers switched to higher priced "premium" beers. AB InBev faced floods in South Africa hitting production and supply chain problems elsewhere in the continent. Profits in the EMEA unit though were still higher than a year earlier.
AB InBev's Asia-Pacific operations also suffered lower volumes, principally due to COVID-19 restrictions in China, albeit with a recovery in June as those restrictions eased.
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