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Brewer InBev's 4Q profit more than doubles as it warns of tougher times ahead

Brewer InBev's 4Q profit more than doubles as it warns of tougher times ahead

Belgian brewer InBev SA's profit more than doubled in the fourth quarter to euro900 million (US$1.35 billion) from euro371 million (US$490 million) a year earlier as it sold more beer in Latin America, eastern Europe and Russia, the company said Thursday.
But the brewer of Beck's and Stella Artois warned of tougher times ahead as higher prices for transport, packaging and raw materials add costs while a slowing global economy eats into sales.
Strong growth in the first half of 2007 "will lead to challenging comparables for the first half of 2008" as volume sales slow, it said, promising it would not hike prices more than inflation _ which it forecasts as an average of 4 percent in the regions where it operates.
The company has relied on strong sales in booming markets in Latin America _ where it sells Brazil's Brahma beer and Argentina's Quilmes _ and its move into eastern Europe and Asia as western Europeans increasingly shun beer for wine and other drinks.
InBev pointed to particular problems with Britain, where market share continues to slide as drinkers turn away from Stella lager, and China, where sales were below the industry average last year.
It said it would buy out its Chinese partner in a Zhejiang brewery where it bought a 70 percent stake four years ago.
Fourth quarter profit, up 142 percent from the same period in 2006, came in far ahead of a euro490 million (US$737 million) forecast from analysts surveyed by Dow Jones Newswires. InBev said the figure included euro302 million (US$454 million) of profit from other investments and a reduced tax rate.
Revenue in the three months ending Dec. 31 was euro3.88 billion (US$5.8 billion), up 8 percent from euro3.59 billion (US$4.74 billion) the previous year.
InBev chief financial officer Felipe Dutra refused to comment on speculation that the company was discussing a possible merger with U.S.-based Anheuser Busch.
A new distribution deal with Anheuser in the U.S. is helping to place more InBev beers in American hands, but initial supply problems with switching to the new distribution network held back sales during the full year, the company said.
For all of 2007, InBev saw profit increase just over 5 percent to euro2.2 billion (US$3.31 billion) from euro1.41 billion (US$1.86 billion) in 2006. Full-year revenue went up 8 percent to euro14.4 billion (US$21.66 billion) from euro13.3 billion (US$17.57 billion) in the previous year.


Updated : 2021-05-12 11:31 GMT+08:00