AB InBev lifts dividend but no new share buyback announced
AB InBev’s full-year results statement did say the company had cut debts by a further $1.8bn
29 February 2024 - 15:37
byEmma Rumney
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A worker checks beer quality at an Anheuser-Busch InBev brewery in Leuven, Belgium. File photo: FRANCOISE LENOIR/REUTERS
London — Anheuser-Busch InBev (AB InBev) beat sales estimates and raised its annual dividend by 9% on Thursday, but its shares slipped 2% as investors considered the absence of a new share buyback, poor US sales and the effect of hyperinflation in Argentina.
Investors in the world’s largest brewer are hungry for returns after years of focus on debt reduction as AB InBev tried to pay off an acquisition spree.
That spree built it into a global beer behemoth, but also left it with debts of more than $100bn that it struggled to reduce as quickly as hoped, limiting its ability to return cash to shareholders.
They were cheered in October when AB InBev announced an unexpected $1bn share buyback. However, it did not mention any new scheme on Thursday, even though October’s was 90% complete.
AB InBev’s full-year results statement did say the company had cut debts by a further $1.8bn bringing “additional flexibility” to its capital allocation choices and enabling the 9% dividend increase.
“It is disappointing,” said Daniel Isaacs, equity analyst at AB InBev investor 36ONE, about the absence of the buyback, adding that this was not necessarily expected and would only have been a pleasant surprise.
AB InBev also reported a 6.2% rise in fourth-quarter sales, slightly ahead of analysts’ expectations. However, this was reduced to just 0.5% when the effect of hyperinflation in Argentina was excluded.
AB InBev’s US volumes were also weaker than expected, falling 15.3% in the fourth quarter.
A consumer boycott of key US brand Bud Light has affected the division, knocking it off its top spot as the best-selling US beer.
However, analysts believe the effect of the boycott should now recede and some investors say the future looks brighter across the beer industry.
AB InBev said it expected to grow core profits in line with its medium-term outlook of 4%-8% in 2024. Its shares recovered to trade 0.5% lower by 8.48am GMT.
Rival Heineken, the world’s number two brewer, disappointed investors earlier in February after it struck a more downbeat tone for 2024.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
AB InBev lifts dividend but no new share buyback announced
AB InBev’s full-year results statement did say the company had cut debts by a further $1.8bn
London — Anheuser-Busch InBev (AB InBev) beat sales estimates and raised its annual dividend by 9% on Thursday, but its shares slipped 2% as investors considered the absence of a new share buyback, poor US sales and the effect of hyperinflation in Argentina.
Investors in the world’s largest brewer are hungry for returns after years of focus on debt reduction as AB InBev tried to pay off an acquisition spree.
That spree built it into a global beer behemoth, but also left it with debts of more than $100bn that it struggled to reduce as quickly as hoped, limiting its ability to return cash to shareholders.
They were cheered in October when AB InBev announced an unexpected $1bn share buyback. However, it did not mention any new scheme on Thursday, even though October’s was 90% complete.
AB InBev’s full-year results statement did say the company had cut debts by a further $1.8bn bringing “additional flexibility” to its capital allocation choices and enabling the 9% dividend increase.
“It is disappointing,” said Daniel Isaacs, equity analyst at AB InBev investor 36ONE, about the absence of the buyback, adding that this was not necessarily expected and would only have been a pleasant surprise.
AB InBev also reported a 6.2% rise in fourth-quarter sales, slightly ahead of analysts’ expectations. However, this was reduced to just 0.5% when the effect of hyperinflation in Argentina was excluded.
AB InBev’s US volumes were also weaker than expected, falling 15.3% in the fourth quarter.
A consumer boycott of key US brand Bud Light has affected the division, knocking it off its top spot as the best-selling US beer.
However, analysts believe the effect of the boycott should now recede and some investors say the future looks brighter across the beer industry.
AB InBev said it expected to grow core profits in line with its medium-term outlook of 4%-8% in 2024. Its shares recovered to trade 0.5% lower by 8.48am GMT.
Rival Heineken, the world’s number two brewer, disappointed investors earlier in February after it struck a more downbeat tone for 2024.
Reuters
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Heineken cuts value of SA business by R10bn
AB InBev announces $1bn share buyback
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