The world’s largest brewer Anheuser-Busch InBev took a $2.5bn writedown on the value of its operations as the Covid-19 pandemic heavily cut into global appetite for beer.
The Belgium-based brewer of Budweiser, Stella Artois and Corona said the impairment charge related to the company’s African units, which in a “worst-case scenario” from the impact of the pandemic would be worth less than their previous book value.
Lockdowns and strict limits on socialising across much of the world cut sharply into beer sales during the second quarter, but AB InBev said performance had improved towards the end of the period as restrictions eased.
Volumes of beer sold declined 17.1 per cent in the quarter from a year earlier, less severe than the 23.2 per cent that analysts had expected. Volumes ticked up 0.7 per cent in June.
The company said: “Our performance in the second quarter was materially impacted by the Covid-19 pandemic, as expected. As the quarter progressed, however, we saw considerable improvement.”
The lower sales pushed down normalised first-half profits to $76m from $4.7bn a year earlier, on revenues of $21.3bn, down 12 per cent.
The company also logged net finance costs of $4.2bn in the first half, up from $1.4bn a year earlier, as mark-to-market losses related to hedging of the company’s share-based payment programmes escalated. These losses, linked to generous bonuses paid in shares, came to $1.7bn, compared with a gain of $1.1bn a year earlier.