BRUSSELS (AP) — Anheuser-Busch InBev, the world's largest brewer, on Wednesday posted a 7.2 percent decline in third quarter net profit as asset sales made last year to pay off debt weakened revenue.
The producer of Budweiser, Stella Artois and Beck's said net profit fell to $1.43 billion from 1.55 billion a year earlier. Sales declined to $9.32 billion from $9.76 billion.
The company, based in Leuven, Belgium, sold several units last year to finance its acquisition of Anheuser-Busch of St. Louis, Missouri. The sold assets no longer contribute to this year's profits and sales.
When stripping out the effect of asset sales and currency fluctuations, earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 11 percent to $3.53 billion. Many analysts look at Ebitda for a company's performance.
AB InBev said it expects its fourth-quarter Ebitda to be "materially higher" than in the third quarter, as year-earlier comparisons become more favorable.
Beer volumes remained mostly stable in the third quarter and grew 4.1 percent organically — that is, when not counting the asset sales. Growth in Brazil, China,and Russia offset declines in Western Europe, the United States and Canada.
AB InBev's volume growth is "Latin America-based only," with some contributions from the much smaller Asian-Pacific market, said Gerard Rijk, an analyst at ING in the Netherlands.
The brewer's sluggish sales in Western markets amid the recession echo results from rivals SABMiller and Heineken in recent weeks.
In the U.S., the company's beer volumes fell 1.5 percent, compared with a 4.5 percent decline in Europe. They increased 12 percent in Northern Latin America and rose 7.5 percent in the Asian-Pacific region, driven mostly by China.
"In the United States, sales-to-retailers fell 4.0 percent as high unemployment persists, increasing the economic pressure on many consumers," AB InBev said.
High unemployment among Americans aged 21 to 27 — which runs at almost double the national average — has been particularly challenging for the company, Finance Chief Felipe Dutra told journalists.
To offset falling volumes, the brewer has been increasing beer prices in the U.S., Dutra said. It expects revenue per hectoliter to grow faster than inflation on the fourth quarter.
It is raising prices faster for some brands to encourage consumers to trade up to premium brands such as Budweiser and Bud Light, Dutra said.
Increasing prices "makes clearly sense in the current beer market consolidation," said ING's Rijk. "But you're going to lose consumers."
AB InBev also spent more money on marketing, as it works to establish its U.S. Budweiser brand globally. It rolled out Budweiser in Russia this year and plans to push it into the Brazilian market in 2011. The beer was the only brand sold in stadiums during the football World Cup in South Africa this summer.
"Year to date, we gained or maintained market share in markets representing more than half of our total beer volumes, including Brazil, China, Russia and the United Kingdom," the company said in a statement.
