BUD Anheuser Busch Inbev SA NV

   By Saabira Chaudhuri 
 

Budweiser brewer Anheuser-Busch InBev SA on Tuesday said it would halve its final dividend for 2019 because of the uncertainty and volatility caused by the new coronavirus.

The move comes as the world's biggest brewer contends with the closure of restaurants and bars in many countries as the pandemic spreads. While retail sales of alcoholic drinks have risen in the U.S. and elsewhere lately, analysts expect the overall impact of the virus on booze companies to be negative.

AB InBev didn't give an update on trading but analysts at Jefferies forecast the company's organic revenue to fall 13% this year assuming two quarters of no sales in restaurants, bars and nightclubs globally. Even when governments lift restrictions, analysts expect consumers to be slow to return to restaurants and bars.

The dividend cut--to 50 European cents (54.6 U.S. cents) from 100 European cents--is AB InBev's latest move to bolster its finances in recent weeks, having already issued new bonds and drawn down on existing credit facilities. The lower payout to shareholders will save about $1.1 billion, according to Societe Generale.

While those efforts mean the company likely won't struggle with liquidity, paying down debt--particular as earnings decline this year--will be "a huge challenge," according to Bernstein analyst Trevor Sterling. "In this new world, the challenge of de-levering in 2021 and beyond could well lead to further pressure on future dividends," he said.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

(END) Dow Jones Newswires

April 14, 2020 06:41 ET (10:41 GMT)

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