Anheuser-Busch EBITDA on the rise despite North American struggles

Anheuser-Busch InBev, the largest brewer in the world, has predicted strong revenue and profit growth throughout 2018 after its Brasilian operations returned to form, resulting in much higher-than-expected earnings at the tail end of its recently wrapped up fiscal year.

Anheuser-Busch's EBITDA rose 21% on a like-for-like basis throughout the fourth quarter to $6.19bn, beating forecasts of $6.03bn and the Belgian drinks maker projected revenue and EBITDA would continue to grow in 2018, with revenue per hectoliter, one of the brewer's preferred measures, rising more than inflation and costs.

Net profit for the fourth quarter was $3.04bn, compared to just $400m a year earlier, when the company was hindered by an uptick in the cost of debt related to its SABMiller deal.

Revenue rose to $14.60 billion from $14.20 billion.

"We expect to continue to deliver results that are consistent with that or as strong as that," chief financial officer Felipe Dutra.

AB, makers of Budweiser, Stella Artois and Corona, saw the majority of its brands perform well, keeping the firm focused on persuading more consumers to switch to beer over other drink options.

However, Dutra warned that its first-quarter performance could come in softer than usual due to an earlier Carnival, the historic end of summer drinking in Brazil, and an increased level of marketing spend leading up to the World Cup in Russia in June and July.

AB saved $381m from its almost $100bn acquisition of closest rival SABMiller, bringing the total to $2.1bn, as it targeted $3.2bn from a deal that added Latin American countries and extended its reach into Africa.

With the Brasilian economy returning to growth, after two consecutive years of recession, as unemployment declined while retail sales picked up, AB said it rebounded in Brazil in 2017, with results strongest in the fourth quarter on an EBITDA 23.7% higher than in the previous trading year.

Mexican operations were still strong, with EBITDA gaining 9.1%, despite the disruption caused by two devastating earthquakes in September and multiple hurricanes.

On the other hand, in the United States, the firm's key market, AB saw Budweiser and Bud Light lose market share, but price hikes and thorough cost management allowed EBITDA to increase again.

AB replaced its North American boss at the beginning of 2018 in order to boost its US beer sales, which had fallen roughly 15% since 2008, with beer losing out to wine and spirits at the same time consumers abandoned mainstream lagers for beers from smaller craft brewers.

"We are not satisfied with our market share performance and are working hard to balance the share and profitability equation," AB said on Thursday.

AB announced an unchanged final dividend of €2 per share, taking the total payout for 2017 to €3.60 a share.

As of 1230 GMT, shares had gained 4.73% to $106.18 each.