Brazilian flood dampens Inbev quarterly profit
InBev NV, the world's largest brewer, said profit unexpectedly fell in the first quarter after flooding hurt sales in Brazil and power, grain and aluminum prices rose.
Net income dropped 11 percent to 249 million euros in the three months ended March 31, from 280 million euros a year earlier, Leuven, Belgium-based InBev said yesterday in a statement. That missed the median of six analysts' estimates for a 15 percent increase to 323 million euros.
The maker of Stella Artois and Beck's lager, which said it's had a "difficult start" to the year, was hit harder than competitors by flooding in Brazil because InBev gets half its earnings from Latin America. Demand in the region and in Russia, where the company is the second-biggest brewer, is swelling more quickly than in western Europe and the US.
"Market growth will slow through 2008," Sanford C. Bernstein analyst Trevor Stirling said. "In western Europe and North America, we expect low single-digit revenue growth and a modest margin squeeze."
The quantity of beer sold in the quarter fell 0.4 percent excluding currency swings, acquisitions and disposals, hurt by "weak performances" in Brazil and Russia, InBev said.
Higher prices for grain, energy and aluminum led a 9.9 percent increase in the cost of sales per hectoliter, while operating expenses rose "modestly" on rising sales and marketing costs. InBev said weighted average inflation climbed to 5 percent to 6 percent in the countries it operates in, higher than the 4 percent it previously expected.
The brewer of Bass ale has forecast "greater challenges" in 2008 than in the previous three years, as rising commodity prices pressure earnings. Profit more than doubled in last year's fourth quarter on gains from selling real estate and rose 69 percent in the first quarter of 2007.
InBev fell 19 cents, or 0.4 percent, to 53 euros in Brussels trading on Wednesday. The shares have dropped 7 percent in 2008 after gaining in each of the previous four years.
Agencies
(China Daily 05/09/2008 page16)
