BDWBY - Slump From Post-Covid High Leaves Budweiser APAC With Earnings Hangover | Benzinga
Key Takeaways:
- Budweiser APAC’s first-quarter revenues slipped 0.4% and profits fell 3.4%, sagging from elevated levels a year earlier and dampened by bad weather
- Market watchers say earnings may pick up in the second half, stimulated by events such as the Paris Olympics, but rivalry in the premium beer business is heating up
By Fai Pui
It’s a bit like the downer after a party. Beer industry takings surged last year when China lifted its Covid restrictions, but the high has been wearing off.
Last week Hong Kong-listed Budweiser Brewing Company APAC Ltd. (OTC: BDWBY) became the latest Asian beer producer to report that sales had fallen flat in the first quarter compared to a year earlier, when China’s bars and restaurants were just coming back to life after the privations of the Covid pandemic.
The brewer, which sells brands such as Stella Artois, Corona and Budweiser across Asia, said its revenues slipped 0.4% in the quarter to $1.64 billion, while the volume of beer sales sank 4.8% to 2.11 billion liters.
Other beer producers have also been feeling hangover effects from last year’s release of pent-up revelry. Tsingtao Brewery logged a 5.2% fall in year-on-year revenue for the quarter, while turnover growth at Beijing Yanjing Brewery slowed to just 1.7% from 13.7% a year earlier.
But unlike Budweiser APAC, those brewers managed to improve their bottom lines even as sales momentum moderated. To investors’ disappointment, Budweiser APAC’s net profit actually fell 3.4% to $287 million despite a 4.4% drop in the quarter’s cost of sales. The performance was particularly weak In China, where sales tumbled 6.2% from the year-earlier quarter and revenues took a 2.7% hit.
The sales ...