-- Budweiser Brewing Company APAC (HKG:1876) posted a slight decline in profit attributable to equity holders in the first quarter as revenue fell despite a marginal increase in volumes.
The brewer reported profit attributable to equity holders of $226 million for the three months ended March 31, compared with $234 million a year earlier, according to a Tuesday Hong Kong bourse filing.
Earnings per share declined to $1.68 from $1.76 a year earlier, though it came in well above the Visible Alpha consensus estimate of $0.02.
Revenue fell 0.7% to $1.49 billion, topping the Visible Alpha estimate of $1.44 billion, while revenue per hectoliter declined 0.8% due to increased investments in China.
Analysts at Jefferies said sales were 3% above estimates, supported by both East and West, led by stronger India volumes.
India delivered strong double-digit growth in both volumes and revenue, supported by continued premiumization across its portfolio.
In China, volumes declined 1.5%, though the pace of decline narrowed, while revenue fell 4% amid increased investments in channels and brand activation.
The increased investments in China were mainly directed toward supporting wholesalers, expanding the in-home route-to-market and online-to-offline (O2O) channels, and stepping up brand and marketing initiatives.
This included higher spending on campaigns such as the nationwide rollout of Budweiser Magnum, supported by a partnership with Erling Haaland and the FIFA World Cup platform.
In South Korea, volumes declined by low-teens while revenue fell by mid-single-digits against a high base, reflecting shipment phasing ahead of a price increase in April 2025.
Separately, the company flagged ongoing legal and tax-related issues at its South Korean unit, Oriental Brewery, which has recorded $86 million in cumulative exceptional charges linked to customs audit claims that it is contesting.
The matter escalated in 2025 with indictments tied to alleged embezzlement, commercial bribery, and customs tax issues related to malt imports.
Several entities and senior executives were also named as joint defendants, with proceedings ongoing.
The subsidiary has also received tax assessments totaling about $71 million from Korean authorities for prior years and has prepaid around $62 million while it challenges portions of the claims.
"We believe investors will focus on: 1) strategy in China; 2) raw material cost trends and margin outlook; 3) price hike potential in APAC East amid a soft industry; and 4) potential in India," said Jefferies analysts in a note to clients.
Shares of Budweiser APAC were up marginally in Tuesday morning trade.