InBev Says Fourth-Quarter Profit Surged as Sales Rise
InBev, the world's largest brewer by volume, said Thursday fourth-quarter profit more than doubled as the company increased sales across all regions except Western Europe
Net income rose to 371 million euros ($490 million), up from 165 million euros in the same period a year earlier, the company said in statement. That's just short of analysts' forecasts of 374 million euros ($494.3 million). Revenue rose 8.2% to 3.59 billion euros ($4.74 billion).
Sales fizzed by 10% percent in Latin America, where the company sells more than half its beer, but it sold less in the more profitable market of Western Europe.
North America bounced back with higher sales, while the company continued its push into emerging markets in Central and Eastern Europe -- including Russia -- and Asia where it bought China's Fujian Sedrin brewery last year. InBev is now one of China's biggest brewers.
The company said it reached a 2004 target to make earnings come in at 30% of sales, reporting a 31.9% profit margin that makes it one of the most profitable brewers.
Full-year profit for 2006 rose 56% to 1.41 billion euros ($1.86 billion), with the company saying that saving plans are cutting the cost of sales.
Worldwide volumes rose 5.9% over the year, while actual revenue rose 7.9% to 13.3 billion euros ($17.57 billion) from 11.6 billion euros in 2005.
Selling more beer in emerging markets is shielding the company from poor results in Western Europe where people are drinking less overall and turning to wine or spirits. Volumes in the region fell 1.9% in the fourth quarter and 0.5% over the full year.
Chief Financial Officer Felipe Dutra would not confirm if the company was in talks with U.S. brewer Anheuser Busch -- the world's largest brewer by revenue -- saying he could not comment on "market rumors."
InBev recently signed a deal to give Anheuser exclusive rights to distribute its premium European beer brands in the United States. The company's brands include Stella Artois and Leffe, Beck's and Brahma.