By Fortune Editors and Reuters
July 27, 2017

Strong growth in China, Mexico and new market South Africa helped Anheuser-Busch InBev (bud), the world’s largest brewer, to increase earnings in the second quarter.

The company behind Budweiser, Stella Artois and Corona, which makes more than a quarter of the world’s beer, said the second half of the year also looked “promising.” It was “cautiously optimistic” about Brazil, its second largest market, where it is hoping to end an 18-month slump.

The figures are a welcome vindication for the strategic shareholders who engineered the $104 billion merger with SAB Miller, and who have been under pressure to prove that they can grow businesses as well as just stripping out costs.

Since AB InBev and SAB Miller combined in 2016, they sell more than twice as much beer as nearest rival Heineken. The company was accordingly keen to draw attention to economies of scale it had found since the takeover, boasting of $335 million in savings, far more than achieved in the first quarter. It kept its overall target of $2.8 billion in merger-related synergies unchanged.

Read: Buy. Squeeze. Repeat.

The company’s shares, which have come off 10 percent since a 2017 peak in May, were 4.9 percent higher by 0800 Eastern Time, making them among the strongest performers in the FTSEurofirst 300 index of leading European stocks on Thursday.

“The volumes are decent, albeit with some overshipping in the United States. The synergy figure is above expectations. Overall, it’s decent after several miserable quarters,” said Trevor Stirling, analyst at Bernstein Securities.

AB InBev said volumes rose in almost every market and it pushed through price increases and persuaded consumers to buy higher-priced beers. Of its larger markets, volumes fell in its biggest, the U.S. and Brazil, as well as in Colombia.

Brazil was the only main market to see profits decline, for a sixth consecutive quarter, as Latin America’s largest economy emerges unevenly and slowly from its worst recession in more than a century.

Read: AB InBev’s Craft Brewery Binge Heads To China

Finance Director Felipe Dutra told a conference call that revenues per hectoliter, hit by a 2016 tax increase not fully passed on to consumers, should improve and costs should fall as the Brazilian real recovered from a near 40 percent devaluation to the dollar.

In its largest market, the United States, cost savings pushed up profits but volumes fell as the growth of higher-end beers failed to compensate did not make up for falling sales of Budweiser and Bud Light.

“While we are not satisfied with our market share performance in the U.S. nor our results in Brazil we have delivered strong top-line results in almost every other market and are placed to see the company growth accelerating,” Dutra said.

The brewer saw an overall 1 percent increase in beer volumes and shifted consumers on to higher priced beers, resulting in a 5 percent increase in revenues.

Second-quarter core profit (EBITDA) was up 11.8 percent excluding currency shifts and on a like-for-like basis, at $5.35 billion, compared with the average forecast in a Reuters poll of $5.40 billion.

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