LONDON (Reuters) -Beer giant Anheuser-Busch InBev reported forecast-beating core profit for the second quarter on Thursday as cost cuts offset weaker sales.
The world’s largest brewer by volume reported a 10.2% rise in second-quarter normalised core profit (EBITDA), surpassing analysts’ forecast for growth of 8.3%.
While revenue and volumes fell short of forecasts, analysts said AB InBev, the maker of Budweiser and Stella Artois, had delivered solid performance against generally weak results for peers like Heineken.
AB InBev’s shares gained 1.75% but remain 5% lower than at the start of the year.
Shares of Heineken, the world’s second-largest brewer, fell more than 9% on Monday after the company said an anticipated sales boost had not materialised due to bad weather.
“We are encouraged with our performance in the first half of the year and remain focused on consistent execution of our strategy,” CEO Michel Doukeris said.
AB InBev’s strategy includes driving new growth via zero-alcohol brews and non-beer products like canned cocktails, selling more via digital channels and enhancing efficiency throughout its business.
After the COVID-19 pandemic in 2020 all brewers faced a steep rise in input costs from barley to aluminium but profit margins are now set for expansion as cost pressures ease.
AB InBev was hit by a prolonged consumer boycott of key brand Bud Light in the United States, the impact of which is now also fading.
The brewer maintained its full-year guidance on Thursday which surprised Siphelele Mdudu, investment analyst at AB InBev investor Matrix Fund Managers, who thought the forecast could be raised given the company’s “outstanding” performance.
In China, AB InBev said it was affected by bad weather driving down revenue and volumes by 15.2% and 10.4%, respectively.
In Argentina, a surge in inflation has put pressure on consumers and beer sales. Volumes declined by more than 20% in the second quarter.
The company also saw its revenue fall 0.6% in the key U.S. market, where the boycott of Bud Light knocked the brewer from its top spot as the nation’s best-selling beer last year.
Mdudu, however, welcomed a significant rise in U.S. profits, which AB InBev said was down to productivity initiatives and cuts to sales, general and administrative expenses.
(Reporting by Emma Rumney; Editing by Emelia Sithole-Matarise and Elaine Hardcastle)
