* Q2 core profit $3.90 bln vs Reuters poll $3.78 bln
* Volumes down 1.2 pct, core profit up 5.8 pct
* U.S. margin expands for first time since Q1 2012
* Brazil beer volume down 0.4 pct, from 8.2 pct drop in Q1
* Shares hit 2-month high, up 7.5 pct
By Philip Blenkinsop
BRUSSELS, July 31 Anheuser-Busch InBev,
the world's largest beer maker, sold less beer but made more
money than expected in the second quarter as drinkers absorbed
price hikes and traded up to premium lagers.
The maker of Budweiser, Beck's and Stella Artois reassured
investors on Wednesday with a surge in earnings that showed it
was turning the corner in the United States and Brazil, its two
Its shares shot to a two-month high of 72.77 euros, a gain
of 7.5 percent, and were by far the strongest performer in the
FTSEurofirst 300 index of leading European stocks.
"It isn't by any means a blow-out quarter but it has
exceeded the market's expectations and placated investor
concerns over a weaker Brazil and the lack of margin growth in
North America," said Jefferies analyst Dirk Van Vlaanderen.
The world's top brewers are relying on emerging markets for
growth amid a prolonged squeeze on consumer incomes in
austerity-hit Europe and limited U.S. expansion. But bad weather
and tax-led price hikes have posed challenges recently.
SABMiller, the world's number two brewer, last week
reported a surprise drop in lager volumes in the April-June
period due to a cold and damp spring in Europe and a cooler
build-up to summer in the United States.
Anheuser-Busch InBev said consumers drank less in its two
biggest markets, the United States and Brazil, with the only
marked increase in China. Volumes as a whole dropped 1.2 percent
on a like-for-like basis.
But revenue increased by 3.9 percent and the company
reversed a year-long decline in its profit margin in the U.S.
Second-quarter earnings before interest, tax, depreciation
and amortisation rose 5.8 percent on a like-for-like basis to
$3.90 billion. That beat the $3.78 billion forecast in a Reuters
poll of 11 brokers and banks.
In the United States, where the company has almost half the
beer market, revenue grew due to a late-2012 price increase and
the success of new products, including 6 percent lager Bud Light
Platinum and margarita-flavoured Bud Light Lime Lima-a-Rita.
North American profit margins expanded after four quarters
of declines because it is now producing those beers in more
breweries across the country, reducing the distribution costs.
In Brazil, where it has two thirds of the market, AB InBev
suffered a second consecutive quarter of declining volumes. But
it was a modest 0.4 percent drop after an 8.2 percent slump in
the first three months of the year.
The company said it benefited from better weather and the
Confederations Cup soccer tournament, which added an estimated
30 million litres.
Chief Financial Officer Felipe Dutra said the event had
served as a useful test run for next year's World Cup in Brazil,
when the boost to volumes could be about four times as big.
The company stuck to its guidance for sales in Brazil this
year to be flat or down by a low single-digit percentage.
A number of consumer companies have suffered weakness in
Brazil, which has been hit by sharp food price inflation and
Spirits maker Diageo said on Wednesday its
operations in Brazil had suffered weakness in the year to the
end of June and would stay soft in the next quarter.
However, Dutra said the trend there was improving.
"We think the second quarter is a confirmation of that and
we do expect the second half of the year to be better on average
than the first half," Dutra said.