AB InBev 2Q Net Profit Surged as Sales Recovered -- Update

   By Adria Calatayud

Anheuser-Busch InBev SA said Thursday that net profit for the second quarter rose sharply as sales exceeded pre-pandemic levels, but the Budweiser brewer said it continues to absorb cost headwinds from tight supply chains in the U.S.

The world's largest brewer, which also houses the Stella Artois and Michelob Ultra brands in its portfolio, said quarterly net profit was $1.86 billion compared with $351 million for the year-earlier period, when its performance was hurt by an impairment charge against its African business.

Belgium-based AB InBev said revenue for the quarter increased to $13.54 billion from $10.29 billion a year before. Organic revenue growth for the quarter was 28%, while organic volumes rose 21%. This compared with expectations for increases of 24% and 19%, respectively, according to a company-provided consensus.

AB InBev said its top-line grew 3.2% compared with the second quarter of 2019.

Normalized earnings before interest, taxes, depreciation and amortization for the quarter increased 31% on an organic basis, missing company-provided expectations for a 35% rise. AB InBev's normalized Ebitda fell in the key U.S. and Brazil markets.

The company said second-quarter momentum and cost discipline were partially offset by anticipated transactional foreign-exchange and commodity headwinds, resulting from the effect of currency devaluations in Mexico and Brazil last year. In the U.S., earnings were hurt by elevated costs, as the company continued to absorb headwinds created by tighter supply chains, it said.

Shares at 1206 GMT were down 6.1% at 54.56 euros ($64.62).

The company reiterated its guidance for normalized Ebitda growth of between 8% and 12% for 2021 as a whole, with revenue growth ahead of that range.

Chief Financial Officer Fernando Tennenbaum said costs of raw materials like aluminum and barley are rising, but that AB InBev's hedging policy gives it time to react and look for ways to mitigate the hit. The company will decide whether to pass higher costs on through prices at a local level, he said.

"There are some cost pressures, but it's not a surprise. We were prepared for it and are trying to find ways to mitigate it," Mr. Tennenbaum said in an interview.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

July 29, 2021 08:38 ET (12:38 GMT)

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