AB InBev warns of US$170 million profit loss due to coronavirus
AB InBev has predicted that coronavirus-induced disruption will lead to its worst first quarter results in almost a decade.
The brewer said first quarter earnings will fall by around 10%, blaming this on “a significant decline in demand in China” as a result of the virus’ outbreak at the start of the year, which has left high streets deserted and bars empty. AB InBev was one of the first drinks companies to reopen its offices in Shanghai, and re-opened 33 breweries in China, but is now attempting to shift beer that would have usually been sold in nightlife venues through other channels such as e-commerce.
The outbreak, according to the beer giant, has resulted in lost revenue of approximately US$285 million, and lost earnings before interest, tax, depreciation and amortisation of approximately US$170 million (£132 million) in China.
A statement said that demand during the Chinese New Year “was lower than in previous years as it coincided with the beginning of this outbreak.”
AB InBev’s EBITDA profits fell 5.5% in the last quarter of 2019, well below analyst’s prediction of a 1.9% loss.
Net profits for the final three months of the year were US$114 million (£88 million), compared to US$456 million a year earlier.
CEO Carlos Brito said in a statement: “we are not satisfied with the results.”
“As the world’s leading brewer, our commitment to grow the beer category is unwavering. We will use the learnings from 2019 to better position ourselves to deliver long-term sustainable top and bottom-line growth.”
AB InBev’s veteran CFO, Felipe Dutra, announced earlier this month he would step down from the role in April and hand over to Fernando Tennenbaum, the CEO of the company’s Brazil business, Ambev.