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As expected, AB InBev was hit hard by the corona crisis in the first quarter. However, this only seems to be the beginning of more misery for the brewer, as the April figures show that the damage will be much greater in the second quarter.
Profit drop
During the first three months of the year total volumes decreased by 9.3%. Analysts had expected a volume decline of ‘only’ 7.9%, writes De Tijd. The impact of the corona crisis was greatest in China, where sales fell by no less than 45.4%.
AB InBev’s group sales landed at 11.0 billion dollar (10,2 billion euro), a decrease of 5.8%. As a result of the “continued premiumization and revenue management initiatives”, revenue per hectolitre increased by 3.9%. Nevertheless, gross operating profit (ebitda) fell 13.7% to 3.95 billion dollar (3,66 billion euro).
Bleak outlook
“We expect the impact on our second quarter results to be much greater than in the first quarter,” AB InBev reports in the notes to the quarterly results. “This has already been demonstrated by our global volumes in April 2020, which decreased by approximately 32%, mainly due to the closure of the on-trade segment in most markets and government restrictions on some of our operations in connection with the COVID-19 pandemic”.
The beer giant swallowed all its turnover and profit forecasts for 2020 a few weeks ago. Dividend was also cut in half.
