Anheuser-Busch InBev (AB InBev) has forecast "meaningfully" better 2021 earnings after sales in Brazil and Mexico and a large tax credit inflated profits of the world's largest brewer at the end of 2020.
The maker of Budweiser, Stella Artois and Corona lagers has predicted increased drinking and higher prices as countries emerge from the COVID-19 pandemic.
However, it foresees higher costs from buying dollar-denominated commodities such as barley and aluminium in the Brazilian real and other local currencies, and from a pandemic-driven shift to more consumption at home.
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AB InBev said that its earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 2.4% to $5.07 billion in the fourth quarter.
That was above an average market forecast of $4.8 billion, but was boosted by a tax credit in Brazil. Excluding this, the profit fall was worse than the average 1.0% decline expected in a company-compiled consensus.
The Belgium-based company's shares were down by 6.0% at €50.00 at 0810 GMT on Thursday February 25. Analysts said that the lower underlying profit and cautious margin guidance were behind the decline.
Overall, margins were squeezed by a shift to the higher-priced single-use cans used for at-home drinking from cheaper reusable kegs and returnable glass bottles used in bars and restaurants, as well as higher freight rates.
In Brazil, which is AB InBev's second largest market, the company sold 11.9% more beer in the fourth quarter than a year earlier, with nearly a third of the population benefitting from the government's "corona voucher" payments.
AB InBev gained market share in Mexico from rival Heineken as its brands became available in the country's largest convenience store chain, OXXO. Sales rose after a two-month government-enforced shutdown of brewing operations.
Europe, Middle East And Africa
In Europe, the Middle East and Africa, beer volumes fell by 6% due to lockdowns, although AB InBev said that it did increase market share in France, Germany and the Netherlands.
Earnings grew slightly in South Africa, although the company warned that a third national alcohol ban that lasted a month from December 29 will hit first quarter results.