International Breweries’ parent company and world’s largest beer maker,anheuserBusch Inbev forecasts a “materially worse” second quarter as coronavirus restrictions curb drinking across the globe, although it recorded single digit volume growth in Nigeria in the first quarter for the period ended 31st March.
Revenue tanked 5.8percent materially impacted by lower volumes resulting from the COVID19 pandemic. Revenue per hl grew by 3.9percent driven by the company’s premiumization and revenue management initiatives.
According to the beermaker, business started in the year with good momentum and delivered volume growth of 1.9percent in the first two months of the year excluding China, where the COVID-19 outbreak began in late January. Sadly, the impact of COVID-19 on its global results increased significantly toward the end of the quarter.
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Total volumes declined by 9.3percent with own beer volumes down 10.5percent and non-beer volumes down 0.2percent.
Excluding China, our volumes declined by 3.6% in 1Q20 despite initial growth of 1.9% in January and February.
“In Africa excluding South Africa, we delivered high single digit volume growth in
Nigeria. With respect to COVID-19, measures being taken in Nigeria vary state by state, though most major states have mandated a lockdown,” the beer maker noted.
During the period under review, cost of sales was flat and increased by 10.3 percent on a per hl basis, driven primarily by operational deleverage resulting from the impact of COVID-19 on our volumes and transactional currency headwinds. EBITDA of 3 949 million USD represents a decrease of 13.7percent in the quarter, with EBITDA margin contraction of 331 bps to 35.9percent.
Net finance costs (excluding non-recurring net finance results) were $3160 million in 1Q20 compared to $366 million in 1Q19.
The increase was predominantly due to a mark-to-market loss of $1855 million in 1Q20 linked to the hedging of our share-based payment programs, compared to a gain of $951 million in 1Q19, resulting in a swing of $2 806 million
Normalized profit attributable to equity holders of AB Inbev was -845 million in 1Q20 versus $2 395 million in 1Q19. Underlying profit (normalized profit attributable to equity holders of AB Inbev excluding mark-to-market losses linked to the hedging of our share-based payment programs and the impact of hyperinflation) was $1 015 million in 1Q20 as compared to $1 449 million in 1Q19.
