LEUVEN, Belgium (Reuters) - Anheuser-Busch InBev, the world’s largest brewer, suffered its first decline in core earnings since its formation over a decade ago as recession-hit Brazil depressed beer sales by even more than expected.

The logo of Anheuser-Busch InBev is pictured outside the brewer's headquarters in Leuven, Belgium February 25, 2016. REUTERS/Yves Herman/File Photo

The brewer of Budweiser, Stella Artois and Corona, which makes more than a quarter of the world’s beer, highlighted difficulties it faces in Brazil, its second largest market, with both lower sales and increased costs due to the weaker real.

The company, which paid nearly $100 billion to take over its nearest rival SABMiller last year, reported its first decline in annual core profit (EBITDA), its key earnings measure, since InBev was founded by the merger of Belgium’s Interbrew and Brazil’s AmBev in 2004.

AB InBev shares were down 1.7 percent shortly after the opening bell, making them among the weakest performers in the FTSEurofirst 300 index of leading European blue-chip stocks.

Andrew Holland, beverage analyst at Societe Generale, said fourth-quarter earnings missed market consensus at earnings per share level and to a lesser degree for EBITDA.

“We all knew that Brazil was going to be a basket case again because they told us so, it’s still even more of a basket case than everyone was anticipating,” he said.

AB InBev acknowledged that its market share in Brazil had declined in 2016. Last month, Heineken agreed to buy the loss-making breweries in Brazil of Japanese company Kirin Holdings Co Ltd to become the second largest beer maker there.

AB InBev, now more than double the size globally of nearest rival Heineken after completing the SABMiller deal in October, recognized its performance last year was disappointing and said most of its executive board would not receive bonuses.

It also raised its forecast for merger savings to $1.75 billion from $1.4 billion before. That excluded the $1.05 billion SABMiller had already earmarked before the merger. A number of analysts had been expecting an increase.

AB InBev said it had already captured $829 million of savings. The balance of about $2 billion would come in the next three to four years.

Core profit (EBITDA) fell 3.6 percent on a like-for-like basis and excluding currency impact in the fourth quarter to $5.25 billion, well below the $5.58 billion expected in a Reuters poll of eight analysts.

Excluding Brazil, AB InBev said its core profit in the fourth quarter would have risen 6.4 percent. For the year as a whole, its beer sales would have fallen by 0.1 percent, rather than the 1.4 percent decline reported.

AB InBev beer sales also declined in North America and Europe in the final quarter, but profits grew due to more expensive brands being sold, while Chinese earnings slipped.