Anheuser-Busch InBev NV, the world’s largest brewer, forecast the steepest decline in quarterly profit in at least a decade due to the coronavirus.
First-quarter earnings will drop about 10% after profit growth in 2019 that AB InBev called disappointing. The brewer blamed the biggest jump in raw material costs in a decade for last year’s performance. The stock fell as much as 6.1%.
For a company that says its main product brings people together, the coronavirus presents a particular problem as consumers in China avoid going out in public. Shipments had already started to slow in that market at the end of last year, leading the brewer to lower its guidance. AB InBev is betting on a rebound in the later part of this year, but the lower end of the 2020 forecast of 2% to 5% would be the weakest growth in four years.
The Budweiser maker has reopened over half of its 33 breweries in China and has obtained licenses from the government to restart the remainder of them other than its Wuhan facility.
“We’re fully engaged for a strong recovery when the situation improves,” Chief Executive Officer Carlos Brito said on a call with reporters.
The company was one of the first to reopen its office in Shanghai, with government attending the event. The company has shipped in about a million hygienic masks that it’s distributing to employees and local communities.
The brewer is reallocating the distribution of its beers from nightlife venues, its most profitable points of sale in China, to other outlets such as e-commerce.
Profit fell 5.5% on an adjusted basis before interest, taxes, depreciation and amortization in the fourth quarter, the Leuven, Belgium-based brewer said Thursday. Analysts expected a drop of 1.9%.
The disease outbreak has wiped about $170 million off of AB InBev’s earnings in China in January and February and $285 million off revenue.
AB InBev sold a stake in its Asia-Pacific unit Budweiser Brewing Co. APAC in September to help reduce debt and to serve as a vehicle for mergers and acquisitions.
More must-read stories from Fortune:
—Europe’s first big Covid-19 outbreak roils global markets
—In business vs. coronavirus, coronavirus is winning
—This Greek island is the perfect alternative to Mykonos
—Europe wants business to share its data and open up A.I. systems for scrutiny
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.
