The giant Latin American brewing and soft drinks group, AmBev, reported first quarter earnings before interest, tax, depreciation and amortization (EBITDA) of BR513.9m ($214.1m), a 14.2% increase on last year, in spite of sluggish market conditions in the key Brazilian market.

Net profit fell by 9.2% in the first quarter to BR222.8m ($92.8m), with the company attributing the disappointing performance to wet weather. "We are very strict with ourselves to never use the weather as an excuse for worse volumes but really in the first quarter it is undeniable that the weather got in the way," said AmBev's director of finance and investor Relations Felipe Dutra.

Beer sales in Brazil fell by 12.3% while soft drinks sales fell by 6.7%. However, first quarter turnover at AmBev, which last week acquired a minority stake in leading Argentine brewer Quilmes Industrial SA for $346.4m, rose by 9.6% to BR1.66 billion.

The company, the world's fourth largest brewer whose key brands include Skol, Brahma and Antarctica, said its share of the Brazilian beer market in March had fallen to 67.5% against 68.5% at the end of last year.

AmBev, which was created by the merger in 2000 of Brazil's largest drinks forces, Brahma and Antarctica, recorded a 67% increase in net profit in 2001, with cost savings and efficiency improvements from the merger offsetting the weakness in the Brazilian market.

The group also announced that it plans to distribute its soft drink brand, Guarana Antarctica, in Japan during the World Cup in June. The brand is expected to be handled by PepsiCo.