Top brewer AB InBev increases dividend, but no new share buyback

Anheuser-Busch InBev beat sales estimates and raised its annual dividend 9% on Thursday, but its share price slipped 2% as investors thought about the absence of a new share buyback, poor US sales and the effects of hyperinflation in Argentina.

The world’s largest brewer’s investors are hungry for returns after years of focus on cutting debt as AB InBev tried to pay for the acquisition spree that built it into a global beer giant. Battling to cut debt of more than $100bn as quickly as hoped limited its ability to pay shareholders.

They were cheered in October when AB InBev announced an unexpected $1bn share buyback. But it mentioned no new scheme on Thursday, though October’s was 90% complete.

AB InBev’s annual results statement said the group cut debt by a further $1.8bn, bringing “additional flexibility” to capital allocation choices and enabling the 9% dividend rise. Daniel Isaacs, equity analyst at AB InBev investor 36ONE, said a new buyback was not necessarily expected but its absence was “disappointing”.

AB InBev reported a 6.2% rise in fourth-quarter sales, slightly ahead of analyst expectations. But this was only 0.5% when the effect of Argentina’s hyperinflation in Argentina was excluded.

AB InBev US volumes were weaker than expected, falling 15.3% in the fourth quarter. A consumer boycott of key US brand Bud Light knocked the division off its top spot as bestselling US beer. But analysts said the boycott’s effect should recede. Some investors say the industry’s future looks brighter.

AB InBev said it expected to grow core profits in line with its medium-term outlook of 4%-8% in 2024. Its stock recovered to trade 0.5% lower by 8.48am GMT. Global number two brewer Heineken disappointed investors earlier in February when it struck a more downbeat tone for 2024.