AB InBev eyes Hong Kong listing as it misses earnings expectations
By Nick Hedley - May 9th, 10:02
Anheuser-Busch InBev (AB InBev), which took over SABMiller in 2016 and is the world’s biggest brewer, says it plans to list its Asia-Pacific business in Hong Kong.
The listing of a minority stake on the Hong Kong Stock Exchange was subject to valuations and prevailing market conditions, management said recently.
The Asia-Pacific region accounts for about 18% of AB InBev’s total volumes, although volumes in the region declined in the first quarter of 2019, the group said.
The merits of a listing “are based upon the creation of an Asia-Pacific champion in the consumer goods space”, the group said.
“Furthermore, our superior portfolio of brands and leadership position in the beer industry provide an attractive platform for potential mergers and acquisitions in the region.”
Selling a minority stake would also accelerate AB InBev’s strategy to deleverage.
AB InBev said group volumes rose by 1.3% in the first quarter and revenue grew by 5.9% thanks partly to better revenue per hectolitre.
“The topline result was driven by healthy performances in several of our key markets, including Brazil, China, the US, Europe, Colombia and Nigeria,” management said.
However, “softer volume results” were seen in SA and Argentina, “where the consumer remains under pressure due to challenging macroeconomic conditions”.
Revenue declined by mid-single digits in SA partly because of a shift toward premium beverages, where the group’s market share is less than its average despite recent gains driven by Corona and Budweiser, it said.
Group earnings before interest, taxes, depreciation, and amortisation (ebitda) increased by 8.2% in the quarter, which missed analysts’ forecasts. According to Bloomberg data, analysts expected 8.6% growth in ebitda.
AB InBev said profit, excluding mark-to-market gains linked to the hedging of its share-based payment programmes and the impact of hyperinflation, was $1.572bn, compared to $1.685bn a year before.
The integration process with SABMiller yielded “synergies and cost savings” of $100m in the quarter.
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