BRAZIL: AmBev's soft drinks move "paying off" as H1 profits rise

By | 31 July 2012

  • H1 net profits rise 9.7% to BRL4.31bn (US$2.11bn)
  • Net sales up 13.6% to BRL14.06bn
  • Operating profits rise 11.7% to BRL6.34bn
  • FY volume growth expected to be "higher than last year" 
AmBev saw H1 profits rise in part due to volume growth in Brazil

AmBev saw H1 profits rise in part due to volume growth in Brazil

Volume and sales growth in its home market of Brazil, despite a slowing economy, has helped AmBev deliver a healthy rise in profits in its first-half, the company said today (31 July). 

Net profits rose 9.7% to BRL4.31bn (US$2.11bn) in the six months to the end of June, while sales were up 13.6% to BRL14.06bn. Operating profits rose 11.7% to BRL6.34bn. 

Beer volumes in AmBev's home market of Brazil rose 2.8% in Q2, helped by a "solid performance" by its Antarctica Sub-Zero brand and "premium brand strategy" for Budwesier and Stella Artois. In soft drinks, the performance of Guaraná Antarctica, a guaraná-flavoured drink, contributed to volumes rising 6.9% in Brazil. 

On the group's performance, João Castro Neves, Ambev's CEO, said that "efforts over the last few years to improve our product portfolio not only in terms of packaging innovation but also in terms of developing new flavors and entering into new non-alcoholic beverage categories is paying off". 

In May, AmBev subsidiary Ambev Brasil Bebidas completed a US$237m acquisition of Heinekin's 9.3% stake in Dominican Republic's largest brewer, Cervecería Nacional Dominicana (CND), giving the company majority control. AmBev also merged its beer operations in Brazil with Grupo León Jimenes.

Neves added: "There is still much to be done, but I am confident we are on the right track." 

Elsewhere, Labatt in Canada saw EBITDA drop 2.1% year-on-year to BRL52.2m, caused by "higher sales and marketing" costs. 

Q2 profits were up 6.6% to BRL1.96bn, while sales rose 17.4% to BRL6.83bn. 

Looking ahead, AmBev said it believed full-year volume growth willl be higher than last year and said it will "continue to pursue a more balanced top line growth than 2011". 

But it added: "Given the increase in Brazilian federal excise taxes taking effect in October 2012, we may also be required to revise the magnitude of our capex plans of up to BRL2.5bn for the country in 2012."

AmBev's parent company, Anheuser-Busch InBev also reported Q2 and H1 sales today

To view AmBev's full release, click here 

Sectors: Beer & cider, Emerging markets – BRIC, Soft drinks, The off-trade, The on-trade

Companies: AmBev

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