AB InBev, the world largest brewer, recorded for the first time in its 13 years of history a sharp decline in core earnings. The quarterly results, which are the first consolidated figures after the purchase of rival SAB Miller, were nearly 4% down to $5.25bn mainly due to a weak performance of the Brazilian market. Without Brazil, core earnings would have been 6.4% up.
Profit attributable to equity holders of AB InBev collapsed by 85% to disappointing $1.2bn due to financing costs and depreciation of the SAB Miller deal. "It was a tough year but we remain committed to an attractive Brazil market and believe we have the right strategy to get the business back on track," chief financial officer Felipe Dutra told the press.
As a direct reaction to the much lower than expected figures, AB InBev announced to raise its cost-savings target to at least $2.8bn, up from $2.45 billion previously. This includes $1.05bn cost savings, which SAB Miller already announced before the takeover. According to the company, savings of $829m have already been captured up to now. The balance has to come within the next 3 to 4 years.
Investors were disappointed with the performance and sold AB InBev shares. Shares traded about 2.5% lower than the previous day.