Higher costs eat into AB InBev's profit margin

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AB InBev saw revenue rise dramatically above pre-pandemic levels in the second quarter, but increased costs kept earnings below expectations.

 

Strong revenue growth

The world's largest brewer sold almost 21 per cent more beer between April and June than during the same period last year. As a result, total revenues increased by 27.6 per cent to 13.5 billion dollars (11.4 billion euros): this is also 3.2 per cent more than the last pre-pandemic result (2019).

 

Despite this strong revenue growth, profit remained below expectations, writes Belgian newspaper De Tijd. Normalised gross operating profit (EBITDA) increased by 31 per cent to 4.8 billion dollars (almost 4.1 billion euros), but analysts expected growth of 35 per cent. In the United States (-0.6 per cent) and Brazil (-10.9 per cent), there was even a decline in EBITDA due to rising commodity prices and higher distribution and marketing costs.

 

Consequently, profit growth came from other regions, such as Europe, where the Stella Artois and Corona brands did very well. Colombia, South Africa and China also posted considerable profit increases.

 

For the full year, AB InBev maintains its earlier forecast of 8 to 12 per cent profit growth.