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AB InBev hikes dividend, sees Brazil, China challenges

Anheuser Busch InBev, the world's largest brewer, hiked its proposed dividend and forecast challenging markets in Brazil and China after fourth-quarter earnings came in below expectations.

The Belgium-based beer maker, which is set to buy next largest rival SABMiller for around $100 billion, raised its dividend to a total of 3.60 euros from 3.00 euro, compared with a market expectation of about 3.30.

For 2016, the maker of Budweiser, Corona and Stella Artois forecast improved volumes and brand mix in its largest market, the United States, another strong year in Mexico, but economic challenges in Brazil and China.

Daniel Acker | Bloomberg | Getty Images

China, the world's second-largest economy, grew at its slowest rate in 25 years in 2015, losing more steam at the end of the year.

Brazil, Latin America's biggest economy is on track for its worst recession since records began in 1901, after contracting 4 percent last year. Inflation is running at a 12-year high.

Nevertheless through price hikes and a shift to more expensive beers, AB InBev said revenues in Brazil, where it has a two-thirds market share, should increase by a mid to high single-digit percentage this year after a weak first quarter.

In China, the brewer said it expected to fare better than the industry average.

AB InBev also said core profit (EBITDA) for the fourth quarter grew by 6.6 percent on a like-for-like basis to $4.31 billion, against the median forecast in a Reuters poll was $4.73 billion.

Volumes declined in the United States and Brazil in 2015 although price hikes and the shift of drinkers to high-priced beers such as Budweiser meant Brazilian and Chinese revenue and margins grew.

The company offered nothing new on its planned SABMiller takeover, saying it still expected the deal to close in the second half of 2016.

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