AB InBev scraps dividend as home drinking pushes up costs
AB InBev, the world’s largest brewer, has scrapped its interim dividend as it announced this morning that quarterly profit dipped as the shift to drinking at home increased its costs.
The firm, which owns Budweiser and Stella Artois, reported a surprise jump in sales as people drank more at home during the coronavirus pandemic.
Overall beer and soft drink volumes rose by 1.9 per cent in the third quarter, following a 17 per cent drop in the previous three month period.
Revenue increased four per cent, against analyst expectations of a four per cent decline.
However, the trend has pushed up costs as AB InBev needs to produce and ship more packaging, cans and bottles rather than the cheaper kegs delivered to hospitality venues.
Heineken, the world’s second largest brewing company, said yesterday that it is grappling with a similar problem.
AB InBev said it has decided to scrap the interim dividend despite improving results due to the “uncertainty and volatility” arising from the coronavirus pandemic.
AB InBev chief executive Carlos Brito said: “Our third quarter results reflect our fundamental strengths as the world’s leading brewer and the resilience of the global beer category.
“We delivered a strong and balanced top-line performance by quickly adapting to meet the evolving needs of our customers and our consumers.
“In an ongoing volatile and uncertain environment, we remain focused on being part of the solution by prioritizing the health and well-being of our people, communities and customers.”