AB InBev foresees better year as lockdowns lift

Strong sales in Brazil and Mexico helped the world's largest brewer post higher-than-expected profit to end 2020.

On Thursday (February 25) AB InBev forecast a "meaningfully" better 2021.

The maker of Budweiser, Stella Artois and Corona lagers predicted increased drinking and higher prices as countries emerge from lockdowns.

The Belgium-based brewer said earnings fell 2.4% to just over $5 billion in the fourth quarter, above forecasts.

Overall, margins were squeezed due to a shift to higher-priced single-use cans for consumption at home.

As opposed to the cheaper reusable kegs and returnable glass bottles used in bars and restaurants.

AB InBev was also hit by tighter freight rates.

In Brazil, the firm's second largest market, it sold 11.9% more beer in the fourth quarter than a year earlier.

Drinkers there benefited from the government's so-called "corona voucher" payments.

In Europe, the Middle East and Africa beer volumes fell 6% due to lockdowns.

But the company said it increased market share in France, Germany and the Netherlands.

In South Africa, earnings grew slightly.

But AB InBev warned that a third national alcohol ban that lasted a month from the end of December would hit first-quarter results.

Its shares were down around 4 percent in morning trade.

Video Transcript

- Strong sales in Brazil and Mexico helped the world's largest brewer post higher than expected profit to en 2020. On Thursday, AB InBev forecast a meaningfully better 2021. The maker of Budweiser, Stella Artois, and Corona lagers predicted increased drinking and higher prices as countries emerged from lockdowns. The Belgium-based Brewer said earnings fell 2.4% to just over $5 billion in the fourth quarter, above forecasts.

Overall, margins were squeezed due to a shift to higher priced single-use cans for consumption at home, as opposed to the cheaper reusable kegs and returnable glass bottles used in bars and restaurants. AB InBev was also hit by tighter freight rates. In Brazil, the firm's second largest market, it sold 11.9% more beer in the fourth quarter than a year earlier. Drinkers there benefited from the government's so-called corona voucher payments.

In Europe, the Middle East, and Africa, beer volumes fell 6% due to lockdowns. But the company said it increased market share in France, Germany, and the Netherlands. In South Africa, earnings grew slightly. But AB InBev warned a third national alcohol ban that lasted a month from the end of December would hit first quarter results. Its shares were down around 4% in morning trade.