Solid AB InBev performance leaves investors cold

The world’s biggest brewer, AB InBev, is confident of further growth in the fourth quarter after a good performance in Q3, however, its shares hit a two week low this week.

Investors, used to positive surprises from the brewer according to Reuters, were left disappointed with the Q3 results which, although positive, fell largely in line with forecasters’ predictions.

Shares in AB InBev fell by as much as 2.4% to hit a two week low and leaves the brewer as one of the weakest performers in the FTSEurofirst 300 index.

The company’s core profit (EBITDA) rose 9.1% in Q3 before tax, interest, depreciation and amortisation to US$3.53 billion (£2.2bn), despite an increased advertising spend due to the World Cup, while organic beer sales rose 3.9% .

On the other hand, the “challenging” trading conditions in North America and Western Europe meant that the firm only made a net profit of $1.43bn, down 7% on the same period last year.

Revenue sales also fell by 5% to $9.3bn. Sales in Europe fell by 5% and in North America by 1.5%.

However, the rapid rise of beer consumption in Brazil, China and Russia means that the brewer is sure of “materially higher” growth in the final three months of the year.

Beer sales in Brazil rose 12.5%, those in China 8.1% and in Russia by 8%.

Rupert Millar, 03.11.2010