AB Inbev 2016 profits miss estimates on Brazil weakness

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AB InBev’s 2016 results have been pinched by lower demand for beer in Brazil.

The Belgium-based brewer reported earnings before interest, tax, depreciation and amortisation fell 0.1 per cent in 2016 to $16.75bn, coming in below analysts’ estimates compiled by Bloomberg of $17.22bn. Ebitda excluding Brazil rose 6.3 per cent in 2016.

Brazil also dragged down fourth-quarter earnings with ebitda down by 3.6 per cent in the three months to December to $5.25bn, coming in below analysts’ estimates compiled by Bloomberg of $5.64bn.

Revenue for the brewer, which makes Budweiser, Stella Artois and Corona, grew by 2.4 per cent in 2016 to $45.52bn, above estimates of $44.9bn.

Revenue per hectolitre, the brewer’s preferred measure of net sales, grew by 4.5 per cent in 2016.

Weakness in the Brazil market was linked to declining real disposable income and rising unemployment in the country, but the brewer remains positive on the outlook:

We have been operating in the country for almost 30 years and understand that its long-term growth trajectory comes with inevitable periods of volatility. Favourable demographics, the closing of regional disparities in per capita incomes and consumer demand for innovative and premium products should help drive long-term growth.

AB InBev reported $282m of synergies and savings made between April and December in connection with its £79bn takeover of SABMiller, which comes on top of the $547m saving reported by SABMiller.

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