By Emma Rumney
LONDON, Oct 29 (Reuters) – Anheuser-Busch InBev on Thursday met forecasts for third-quarter profit even as rising costs dragged on its gains, with the top brewer the latest consumer company to flag growing cost pressures in recent weeks.
Consumer goods companies have stepped up their warnings on costs as the Iran war and its impact on the global economy drag on, with brewers like AB InBev, the world’s largest by global volumes, hit by higher costs for energy, diesel, aluminium and more.
The maker of Stella Artois and Budweiser said its organic operating profit in the quarter was up 3.9%, although revenues had risen more than expected, with commodity costs offsetting top-line growth in some countries.
AB InBev flagged higher commodity, distribution and transportation costs in key markets like the United States, Europe and South Africa, where investments in sales and marketing also ate into profits. Its operating margin contracted 34 basis points to 36.1%, it said.
Consumer goods bellwether P&G last week said higher costs would strike a bigger blow to annual profit. Tobacco maker Philip Morris International too said global conflicts were weighing on its earnings. Coca-Cola also warned of accelerating cost pressures.
Analysts also expected cost pressures to hit AB InBev in the quarter, citing the impact of unhedged diesel prices, higher prices for new hedges on aluminium and more.
Diesel prices have jumped to record highs because of the Iran war, pushing up freight and transport costs across industries. The conflict has also made energy more expensive, and put pressure on supplies of aluminium, already at elevated prices for US buyers like AB InBev due to President Donald Trump’s tariffs.
(Reporting by Emma Rumney; Editing by Tom Hogue and Saad Sayeed)
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