AB InBev hails the return of beer drinkers

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AB InBev hails the return of beer drinkers

Published Date: 2020-07-31 | Source: Stephen Gunnion | Author: Stephen Gunnion

AB InBev hails the return of beer drinkers

The global brewing giant has impaired its African operations and says the second alcohol ban in SA will affect its third-quarter performance.

Anheuser-Busch InBev (AB InBev) says global beers sales recovered in June to beat last year's levels following declines in April and May. However, after the SA government imposed a second ban on alcohol sales, the global brewing giant has impaired its Africa operations.

Reporting back for the second quarter and half year to end-June, AB InBev said while its performance had been materially impacted, it saw a big improvement as the quarter progressed. After falling 32.4% in April and 21.4% in May, volumes grew by 0.7% in June. An impairment review concluded that it was exposed to risk in SA and its Rest of Africa business, resulting in a $2.5 billion non-cash impairment charge. This was partially offset by a $1.9 billion gain on the disposal of its Australian operations.

In SA, after resuming operations at the beginning of June, it saw a strong recovery with volume growth in the high single digits before the second ban was implemented mid-July. It said it remained focused on working with the government on measures that would meaningfully combat the public health crisis, while supporting the country's much-needed economic recovery.

Revenue fell 17.7% for the three-month period, taking first-half revenue down by 12%. Combined revenues of its global brands - Budweiser, Stella Artois and Corona - declined by 16.6% globally and by 12.6% outside of their respective home markets. For the half year, earnings before interest, tax, depreciation and amortisation (EBITDA) fell 24.7% to $7.36 billion. Underlying earnings per share, which exclude mark-to-market gains and the impact of hyperinflation, halved to 90 US cents.

The group said the trajectory of its business throughout the second quarter reinforced its confidence in the resilience of the beer market, particularly in the off-premise channel, where it saw healthy growth in developed and developing markets.

Its shares closed 3.9% higher at R967.83 yesterday.





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