JOHANNESBURG – Anheuser-Busch (AB) InBev on Monday formally informed its shareholders that it would cut its dividend by 50 percent this year to €0.80 (R12.79) as it attempts to recover from the loss of more than 40 percent of its stock in the 2018 financial year.
The Belgian brewer, which bought SABMiller for R1.27 trillion in 2017, said the dividend declared in February would be lower than the €1.60 it paid out last year.
“Notice is hereby given that as a result of the dividend declaration relating to Anheuser-Busch Inbev SA/NV (ANH) shares, the holders of ANHSTA share instalments will receive an Anheuser-Busch InBev SA/NV (ANH) dividend per instalment gross dividend,” the group said.
AB InBev shares fell in the US and Europe to just more than R1 000 from R1 700 over the 2018 fiscal period.
Last year the group went through a rough patch after being beleaguered by debt, partly stemming from the SABMiller acquisition and under-performance particularly in the under-performing emerging markets of Brazil, Russia and China.
AB InBev has reversed course in 2019, largely because of its commitment to right-size its balance sheet, analyst optimism, post-earnings gains, and new product innovation, from cocktails to cannabis. While sceptics remain, the shares have climbed 27.7 percent to date, although that still leaves AB InBev down 23 percent for the latest 12 months.
The company produces a third of the world’s beer and its takeover of SABMiller in 2016 was largely done to acquire SABMiller’s emerging markets, with a focus on South Africa as the launchpad to the rest of the continent. The group expects to launch its first brewery in Mozambique later this year, and production started last year in Nigeria, while plans are on the table to build a brewery in Tanzania.
Last year, it set a R2.8bn capital expenditure programme in motion to expand its capacity by installing new packaging lines. It is also expanding its breweries in Alrode, near Johannesburg, and Rosslyn in Pretoria, while launching another line in Port Elizabeth later this year.
The group said the dividend, which would be paid out next month, remained subject to the dividend withholding Tax Rate of 20 percent. The net dividend will be announced after an exchange rate announcement in cents. “One of AB InBev’s billionaire shareholders believes Africa’s rapid urbanisation and warm climate could eventually see it overtake the US in beer sales,” an analyst said on Monday.
AB InBev had already made significant investments in the local market.
AB InBev shares rose 0.12 percent on the JSE on Monday to close at R1258.57.