BRIEF: Budweiser APAC profit sags amid weaker margins

Beer maker Budweiser Brewing Co. APAC (1876.HK) announced on Tuesday its net profit fell 3.4% year-on-year to $226 million in the first quarter. Its normalized EBITDA came in at $463 million, down 8.1% year-on-year, as its normalized EBITDA margin fell by 246 basis points to 31.0%.

The company’s total sales volume reached 1.97 billion liters during the period, down 0.02% year-on-year. Its revenue on an organic basis was $1.49 billion, down 0.7%. The company attributed the drop mainly to increased investment in China and a 0.8% decrease in revenue per hectoliter. Its profit was also undermined by higher investment and lower other operating income.

By market, the company’s China sales volume fell 1.5% year-on-year, though the decline marked an improvement compared with previous periods. Its China revenue dropped 4.0%, which the company attributed to increased spending on distributors and channels. India recorded double-digit growth in both volume and revenue, while South Korea saw low double-digit volume declines due to a high comparison base from the year-ago period.

Management said total volume returned to growth in the first quarter, supported by strong momentum in India. In China, the increased investment is gradually beginning to bear fruit, with volume declines continuing to narrow, driven by strategies including expansion of off-premise channels, portfolio optimization, and innovation in flagship brands to restore growth momentum.

Budweiser APAC shares opened flat on Tuesday and traded at HK$7.94 by the midday break, up 0.13%.

By Lee Shih Ta

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