AB InBev reports better than expected sales

The maker of Budweiser and Stella Artois saw better than expected beer sales this year despite coronavirus lockdowns shutting down bars and restaurants for months.

AB InBev’s volume sales fell by 17.7% in the second quarter, which was slightly better than the 32.2% decline analysts had predicted. Core profit also fell by 34% to $3.41 billion on a like-for-like basis.

Volumes fell 12% in the year to June 2020, after global lockdowns closed off much of the brewers’ route to market.

It also booked a $2.5 billion write down, which was the result of a “risk of impairment” for its business in Africa, AB InBev said on Thursday, due in large parts to South Africa’s current ban on domestic alcohol sales.

Combined revenues of Budweiser, Stella Artois and Corona fell by 16.6% globally in the second quarter, and  In HY20, by 14.1% in the year to June.

Volumes fell 32.4%, after AB InBev’s brewing operations in Mexico, South Africa and Peru were shut down, while on-trade venues remained closed in most markets.

However, the company is optimistic of an uptick in sales in the second half of the year, adding a “sequential improvement in May, with a volume decline of 21.1%” was a sign of hope for the year ahead. Global volumes grew 0.7% in June, when on-trade venues in mainland Europe started to reopen, and South Africa’s alcohol ban was briefly lifted. The brewer said it expects the ban’s reinstatement will impact its results for the third quarter.

AB InBev said its second quarter sales were “materially impacted by the COVID-19 pandemic, as expected. As the quarter progressed, however, we saw considerable improvement.”

“The continued reopening of the on-premise channel around the world also contributed to an improved performance, especially in May and June.”

“We are excited about the return of these consumption occasions, while remaining cautious as we are now seeing renewed on-premise restrictions in certain markets.”