Beer brewer will step up cost cutting

SYDNEY - Anheuser-Busch InBev NV, the brewer created in a $52 billion merger last year, will step up cost cuts from the United States to China after higher financial expenses stemming from the takeover drove profit down 41 percent.

The world's biggest brewer said cost reductions since the purchase Anheuser-Busch Cos. have "exceeded expectations" so far, and at least $1 billion less capital spending is planned this year. AB InBev, which reported full-year earnings yesterday, will pare $2.25 billion a year in expenses by 2011, up from the previous $1.5 billion target.

Chief financial officer Felipe Dutra signaled more job cuts were unlikely following a wave of layoffs. The brewer has issued bonds and sold assets to cut the $45 billion of debt taken on when the Belgium-based brewer bought Anheuser-Busch.

AB InBev also proposed an annual dividend of 28 cents per share, less than in 2007, as the brewer wants to "privilege debt reduction," Dutra said.

Net income declined to $1.63 billion, or $1.62 a share, from $2.76 billion, or $2.83, a year earlier. Net finance costs rose to $1.23 billion from $750.8 million a year earlier.

Dutra said AB InBev will apply its cost-cutting program, which it calls zero-based budgeting, across capital spending and former Anheuser divisions. Capital expenditure was cut by $250 million in 2008. Chief executive Carlos Brito and other directors won't get a bonus this year after missing their targets, the brewer also said.