AB-InBev’s first quarter profits hit by a financing charge

Hadn’t it been for Brazil, AB-InBev’s volume output would have dipped significantly in the first quarter especially since it looks like AB-InBev continues to underperform the market in the United States.

According to figures published by the Beer Institute, the U.S. beer industry association, domestic beer production in the U.S. during the first quarter 2010 dropped 4.8 percent compared to the same quarter last year.

In Western Europe, AB-InBev said own beer volumes declined 1.2 percent, while total beer volumes decreased 2.9 percent. Own beer volumes in Belgium fell 9.4 percent, mainly because of the strike in January.

In Germany, AB-InBev’s own beer volumes dropped 5.2 percent. This is despite the fact that German brewers as a whole sold 1.1 percent more beer in the first quarter compared to the same period last year.

In the United Kingdom, AB-InBev’s own beer volumes improved 1.3 percent, outperforming the industry where volumes declined 3.5 percent. AB-InBev claims Budweiser volumes grew over 40 percent behind reinforced brand support, especially in the off-trade channel.

Western Europe EBITDA increased 31.3 percent to USD 191 million, benefitting from synergies relating to the combination with Anheuser-Busch in the United Kingdom, lower costs as a result of the sale of a distribution asset, and lower sales and marketing expenses. The EBITDA margin of 22.4 percent in western Europe marks an improvement, AB-InBev reported.

AB-InBev maintained its 2010 outlook and said it expects sales volumes to hold steady in the second quarter before rising through the second half of the year.

However, second quarter EBITDA is expected to decline from the first quarter, AB InBev said.