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© Reuters. FILE PHOTO: A employee checks beer high quality at Anheuser-Busch InBev brewery in Leuven, Belgium November 25, 2019. REUTERS/Francois Lenoir/File Picture
LONDON (Reuters) -Anheuser-Busch InBev raised its annual dividend by 9% on Thursday, although analysts warned buyers could also be disenchanted by the absence of a brand new share buyback and worse-than-expected U.S. gross sales.
Buyers on the earth’s largest brewer are hungry for returns after years of give attention to debt discount as AB InBev tried to repay an acquisition spree.
That spree constructed it into a world beer behemoth, but additionally left it with money owed of over $100 billion that it struggled to cut back as rapidly as hoped, limiting its potential to return money to shareholders.
Now, it’s more and more trying to reward their endurance. It stated it had lowered money owed by an additional $1.8 billion, to face at $78.1 billion on the finish of final yr.
“In consequence, now we have further flexibility in our capital allocation selections.”
The dividend enhance comes after AB InBev introduced a uncommon share buyback plan in October, boosting its shares. Some buyers could also be disenchanted the buyback programme has not been renewed, Edward Mundy, analyst at Jefferies, wrote in a observe.
James Edwardes Jones, an analyst at RBC Capital Markets, added that quantity declines in america had been additionally worse than anticipated, although total the outcomes had been “adequate”.
AB InBev’s gross sales in its hefty U.S. enterprise have been hit by a client boycott of key U.S. model Bud Gentle, knocking it off its prime spot because the best-selling U.S. beer.
The corporate’s U.S. beer volumes slumped by 15.3% within the fourth quarter.
AB InBev reported a 6.2% rise in fourth-quarter gross sales versus analysts’ expectations of 6.1% in a consensus estimate offered by the corporate.
It forecast 2024 core income to develop consistent with its medium-term outlook of 4-8%.
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