BRAZIL: AmBev survives Q3 wobble to post higher nine-month profits
- Nine-month normalised net profits rise by 10% to BRL5.57bn
- Net sales up by 5.5% to BRL18.75bn
- Normalised EBITDA up by 9.5% to BRL8.63bn
- Price rises lift beer sales, Brazil to improve in 2012
AmBev uses pricing, cost savings to lift profits
Price rises on beer helped AmBev to a solid increase in net sales for the first nine months of its fiscal year, while profits were also higher, despite a decline in the third quarter.
AmBev's net sales for the nine months to the end of September rose by 5.5% to BRL18.75bn (US$10.7bn), the Brazil-based brewer said today (9 November). Over the same period, beer volume sales dipped by 0.7%, said the group, which is owned by Anheuser-Busch InBev.
Sluggish demand for beer in AmBev's core Brazil market has been a key theme for 2011, but price increases have enabled the Brahma lager brewer to bolster net sales. So-called normalised profits attributable to AmBev shareholders, which exclude currency swings and disposals or acquisitions, rose by 10% for the nine months, to BRL5.57bn.
Normalised EBITDA, meanwhile, increased by 9.5% to BRL8.63bn. However, the nine-month figures disguised a wobble in the brewer's third quarter, when net profits fell by 9.5% to BRL1.64bn.
The group attributed this to foreign exhange losses. Third-quarter EBITDA rose by 11% to BRL2.95bn, backed by a 6.6% increase in net sales to BRL6.37bn, which was, in turn, helped by price increases. Third-quarter beer volumes crept up by 0.2%.
Normalised EBITDA in Brazil rose by 13% for the three-month period, leading AmBev's CEO, João Castro Neves, to proclaim: "Our performance in Brazil shows we took the right decisions to deliver cost management savings, keeping our pricing strategy and being able to benefit from an improvement in the industry volume growth."
Looking ahead, demand for beer in Brazil is expected to improve further in 2012, largely thanks to the Government's plan to increase the country's minimum wage by 7.5% in real terms. On capital spend, AmBev said that it has so far invested BRL2.1bn of its budgeted BRL2.5bn capital investment for 2011.
For the company announcement, click here.
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