As consumers across the world switch their consumption of beers to spirits, brewers are feeling the pinch.
AB Inbev, one of the world’s largest brewers saw a decline in both revenue and profit for the third quarter ended September 30, 2018. Earnings per share also fell sharply, from$2.52 in 2017 to $1.98 in 2018. The company has thus decided to cut its interim dividend, to conserve cash for investing in its brands and to pay down debt.
We are rebasing our dividend payout to accelerate deleveraging toward our optimal capital structure of around a 2x net debt to EBITDA ratio….The firm con
A Bright Spot
While some key markets such as the United States and Europe suffered a decline, Africa (Nigeria in particular) remains a bright spot.
In Nigeria, our volumes grew by double-digits as growth has further accelerated after the opening of our fourth brewery, the largest in Africa outside of South Africa. Budweiser saw very strong growth in the market following its launch during the 2018 FIFA World Cup RussiaTM and is poised well to participate in the country’s increasing premiumization trend.
Muscling the Big Two
Growth in Nigeria could be further proof the company is clawing market share from its bigger competitors Nigerian Breweries and Guinness through its local unit International Breweries.
International Breweries became a part of the AB Inbev Group, by virtue of the latter’s acquisition of SAB Miller.
International Breweries closed at N33.55 on Friday’s trading session at the Nigerian Stock Exchange (NSE). Year to date, the stock is down 38.44%.
Results for the third quarter ended September 30, 2018 show revenue increased from N36.5 billion in 2017 to N83.3 billion in 2018. Profit before tax however fell from N3.1 billion in 2017 to N2 billion in 2018. The company made a loss after tax of N7.1 billion compared to a profit after tax of N1.4 billion made in the prior year.
9M 2018 results are for the combined entity resulting from the merger of the legacy International Breweries with Pabod Beverages and Intafact Beverages.