(Yicai Global) May 7 -- Budweiser Brewing APAC said its sales in China will normalize this quarter, after earnings at the Asia-Pacific unit of Anheuser-Busch InBev plunged in the first three months of the year under the onslaught of the Covid-19 pandemic. It shares fell in Hong Kong.

Business has brightened since March, with China and South Korea both sloughing off the virus. Last month’s sales in China are expected to slip 17 percent but will return to normal levels this quarter, the Hong Kong-based company said in an unaudited financial report it released today.

China sales fell 46.5 percent in the first quarter from a year earlier, revenue fell 45.4 percent, while normalized earnings before interest and taxes and amortization slid by over 69 percent, it said.

Budweiser relies more heavily on domestic nightlife channels in China such as nightclubs, karaoke bars and restaurants than its domestic competitors. Its first-quarter revenue and net profit took more of a hit than those of rival Tsingtao Brewery, which fell only about 21 percent and 35.5 percent.

Catering and commercial channels recovered quickly after the pandemic eased, but the slower restoration of Budweiser’s nocturnal market has stalled its rebound, Zhu Danpeng, a researcher at the China Brand Research Institute, told Yicai Global.

Budweiser’s first-quarter sales in the Asia-Pacific region dropped 42.3 percent to about 128 million liters, while revenue fell 39 percent to USD956 million. Profit before interest and tax amortization was USD171 million in an annual 68 percent decline, per the report.

Budweiser Brewing APAC’s stock price [HKG:1876] fell 2.5 percent today to close at HKD21.20 (USD2.74), after earlier dropping as much as 4.4 percent.

The beer industry may not enjoy compensatory consumption after the pandemic truly ends, but market sales will still return to normal, and the trend towards mid- and high-end will not change, said Hou Xiaohai, chief executive of Hong Kong-headquartered beverage retailing conglomerate China Resources Beer.

Budweiser Brewing APAC produces, imports, markets and distributes over 50 brands, including Budweiser, Stella Artois, Corona, Hoegaarden, Cass and Harbin.

Editors: Zhang Yushuo, Ben Armour