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London - Anheuser-Busch InBev [JSE:ANB] eliminated bonuses for most of top management after earnings trailed analyst estimates for a seventh straight quarter on a slump in Brazil.
Adjusted fourth-quarter earnings before interest, tax, depreciation and amortisation fell to $5.25bn, the Budweiser maker said in a statement on Thursday. Analysts expected $5.64bn. The company also raised its target for cost savings related to the takeover of SABMiller [JSE:SAB].
It’s 'another shocker, but that’s the trough' wrote Eamonn Ferry, an analyst at Exane BNP Paribas. “We had feared the worst this quarter, and so it is. There may well be an element of kitchen-sinking here.”
AB InBev is suffering from a nosedive in spending power in Brazil, its second-largest market. The maker of Goose Island and Stella Artois is hoping for better fortunes in Africa, where last year’s $103bn takeover of SABMiller gave it control of fast-growing local lagers such as Balimi in Tanzania and Eagle in Uganda.
The brewer is also planning to cut about 5 500 jobs as part of the combination, a person familiar with the matter said in August.
Savings from the acquisition of SABMiller should reach $2.8bn within three to four years, 14% more than the previous forecast, the Budweiser maker. AB InBev also said dividend growth will be 'modest' given the need to reduce its debt of $108bn.
Revenue growth will accelerate in 2017, the Leuven, Belgium-based brewer said. AB InBev also cut its budget for capital expenditure to about $3.7bn this year after spending $4.8bn last year.
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