By Philip Blenkinsop
BRUSSELS (Reuters) - Anheuser-Busch InBev, the world's largest brewer, reported a rise in first-quarter core profit in line with expectations on Wednesday as growth in most of Latin America outweighed a decline in its largest market, the United States.
Beer volumes grew strongly in Mexico, Colombia and Argentina, but declined in the United States and in its second most important market, Brazil. However, it increased profits in the latter due to higher prices and cost control.
Core profit (EBITDA), the figure most watched by markets, rose by 6.6 percent to $4.99 billion, in line with the average forecast in a Reuters poll of $4.98 billion.
The maker of Budweiser, Stella Artois and Corona had already said the first-quarter growth would be limited due to higher sales and marketing spending in advance of the soccer World Cup and because the start of 2017 was comparatively strong.
AB InBev did find savings of $160 million from its near $100 billion purchase of SABMiller, bringing the total to $2.29 billion. It is targeting $3.2 billion from a deal that has added Latin American countries and extended its reach to Africa.
In Brazil, the brewer said an earlier Carnival brought to an end sooner the traditional summer drinking season, while weather as poor and the year-on-year comparison was against a strong start to 2017.
However, the company got consumers to pay more for their beer and, together with tight cost control and a stronger Brazilian real, earnings and margins there improved.
AB InBev said it believed volume growth would resume in the second quarter.
In the United States, price hikes and a consumer shift to its more expensive lagers could not offset the volume decline, with both Budweiser and Bud Light losing market share. A rise in the price of hedging commodities and increased freight costs led to margin contraction and a 5 percent profit decline.
AB InBev said it was committed to improving its top and bottom line in the United States.
(Reporting by Philip Blenkinsop; editing by Robert-Jan Bartunek)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)