AB InBev, the world’s largest brewer, said it lost $170 million in profits during the first two months of 2020 because of the coronavirus epidemic.
The company said the outbreak has led to a “significant decline” in demand in China, resulting in lost revenue of approximately $285 million during the period.
The Beck’s and Hoegaarden owner expects first-quarter profit to decline by around 10% given the impact of Covid-19 and a challenging comparable, especially in Brazil.
In 2019, the company posted a 4.3% rise in organic revenue growth to $52.33 billion. However, fourth-quarter normalised EBITDA was down 5.5% to $5.34 billion.
“Our performance in 2019 was below our expectations, and we are not satisfied with the results,” the Belgium-headquartered company said in a statement. “There were many successes, but we also faced many challenges. We understand that in order to reach our ambitious goals, we need to embrace these challenges head-on and transform them into opportunities for success.”
In the US and Brazil, AB InBev saw its four-quarter EBITDA decline by 1.6% and 6.3% respectively.
However, the firm highlighted the strong full-year performance of its global brands – Budweiser, Corona and Stella Artois – which grew revenue by 8% outside their home markets.
Corona led the way with growth of 21% outside of Mexico, with major contributions from markets such as China and South Africa.
Last month, AB InBev introduced Bud Light Seltzer to take advantage of the increasing populirity of hard seltzer. Meanwhile, the company’s Bon Viv and Natural Light Seltzer brands are both “growing at a strong rate”.
“We are confident that we can leverage our strong portfolio, coupled with our best-in-class brewing capabilities and distribution network, to accelerate our momentum in this fast-growing segment,” the company said in a statement.
Last year, AB InBev offloaded its Carlton & United Breweries unit for $11.3 billion and listed a minority stake of its Asia Pacific business (Budweiser APAC) on the Hong Kong Stock Exchange for $5.75 billion.
Earlier this month, the firm announced that chief financial officer Felipe Dutra will step down and be replaced by Fernando Tennenbaum, the CFO of its Brazilian subsidiary Ambev.
© FoodBev Media Ltd 2020