Anheuser-Busch InBev on Thursday reported second-quarter profit above analyst forecasts, but said the second half of the year would be significantly weaker.
We have strong operating momentum going into the second half of 2009, but recognize that many challenges remain. The beer industry, while resilient in most of our key markets, is not immune to economic pressures, Chief Executive Carlos Brito said in a statement.
The world's largest brewer said earnings before interest, tax, depreciation and amortization (EBITDA) rose a like-for-like 18.5 percent to $3.596 billion, compared with the average $3.221 billion in a Reuters poll of 15 analysts.
Overall Cost of sales decreased by 5.6 percent in the second quarter, or 2.4 percent per hectoliter, thanks to brewery productivity enhancements, the group said, adding that all zones performed well and each delivered substantial operating improvements while gaining share in most key markets.
It added it projected cost of sales per hectoliter to run flat or increase by low single digit percentages over the full 2009 year, which it noted was somewhat more optimistic than previously anticipated.
In addition, the group said it began to benefit from lower spot prices for non-hedgeable input costs as well as from favorable currency impacts in the second quarter.
Volumes grew 7.0 percent in Brazil after last year's poor summer there, but decreased by 8.9 percent in Central and Eastern Europe (CEE) due to weak market demand and market share loss in the value segment. CEE nevertheless saw EBITDA growth of 39 percent in the second quarter as a result of price improvements, lower cost of sales and lower distribution costs.
The maker of Budweiser, Stella Artois and Beck's, reporting in dollars from this year, said year-on-year EBITDA gains would be significantly below the 18.5 percent achieved in the second quarter of 2009 however, primarily due to more difficult comparisons.
North America now accounts for about 40 percent of group revenue after InBev's $52 billion purchase of Anheuser-Busch last year. EBITDA there grew by a like-for-like 26.3 percent in the second quarter.
The company impressed in the first quarter with a 25.9 percent on a like-for-like basis, but cautioned that this was not indicative of the rest of the year, partly because of tougher year-ago comparisons.
The company said second-quarter volumes fell by 1.1 percent, against overall expectations for a 1 percent drop.
World number two SABMiller's underlying beer volumes were flat in the second quarter. Those of Carlsberg , the fourth biggest brewer, fell by 6 percent on a like-for-like basis.
AB InBev has described beer as resilient in the face of the slump, although the economic gloom has persuaded consumers to trade down from premium to cheaper brands.
AB InBev repeated its goal of bringing in merger savings of $1 billion in 2009, and said the second quarter had yielded $315 million, bringing the total for the first half of 2009 to $610 million.
The brewer's shares have more than doubled since a November low, when debt concerns and a rights issue weighed them down.
The company gave no news on further divestments. It has so far raised about half of its $7 billion target. Banking sources say it is currently looking to sell assets in seven central and eastern European countries.
(Reporting by Antonia van de Velde; editing by John Stonestreet)