USA: Anheuser-Busch raises 2007 capital spending estimates to $950 mil from $900 mil
Anheuser-Busch raised its 2007 capital spending estimate to $950 million from $900 million, primarily for the construction of its new brewery in China, MarketWatch reported April 25.
Once completed, the facility will make 15 breweries in China owned and operated by the St. Louis-based company, Chief Financial Officer Randolph Baker said in a conference call with analysts and investors.
In the U.S., Anheuser-Busch continues to integrate brands from its partnership with Modelo Group into its distribution network, Baker said. He also confirmed there was some related disruption and confusion in the first quarter, such as issues on how to replenish import inventory more quickly.
Equity income, such as that derived from its partnerships, is expected to grow more than 20% in the 2007, Baker said, adding operating cash flow is expected to increase for the year.
For the first quarter, equity income increased $37 million, primarily due to the improved Modelo Group earnings, and includes a one-time $17 million benefit form the return of an advertising fund.
Elsewhere in 2007, revenue-per-barrel should increase 3% to 4%, primarily from its trademark names, while the cost-of-goods per barrel is expected to jump 4% to 5%, Baker said. Those estimates include the contribution of import brands.
Costs related to advertising, distribution and marketing will likely grow in the mid- to high-single digits, percentage-wise, he said.
Anheuser-Busch also said anticipated low-single digit percentage growth for its international business.
Shares of Anheuser-Busch fell $1.45, or 2.8%, to close at $50.90 Wednesday. Volume was heavy, at about 8.6 million shares, nearly three times the daily average.
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