BRAZIL: Higher beer prices boost AmBev in H1
- H1 net profits rise by 24% to BRL3.95bn (US$2.41bn)
- Net sales increase by 5% to BRL12.37bn
- Operating profits (EBITDA) up by 9.5% to BRL5.67bn
- Brewer suffers weaker volumes in Brazil as consumers trade down to cheaper beers
AmBev survives weak half-year in Brazil
AmBev has said that it lost market share in its key Brazil market in the first half of 2011, but higher prices and lower costs have ensured that profits continued to rise.
AmBev's beer sales slipped by 1% in volume for the six months to the end of June and by 2.6% in the second quarter, it said today (11 August). The Anheuser-Busch InBev-owned brewer was hit in its home market by consumers trading down to cheaper beers, as well as a tough comparative figure due to the FIFA World Cup being held in the same period last year.
The news that AmBev's market share was down by 1.6 percentage points in the second quarter may hearten Kirin Holdings as it seeks to take control of Brazil's second largest brewer, Schincariol. That said, AmBev remains dominant in its home market and it countered that, on a month-to-month basis, it has consistently gained market share since February.
Meanwhile, price rises in Brazil helped the Brahma lager brewer to increase group net sales by 5% for the half-year, to BRL12.37bn. AmBev's CEO, João Castro Neves, said that he still views Brazil's beer market weakness as short-term and added: "We were able to increase our EBITDA margin mainly as a result of our pricing strategy and cost management initiatives.”
AmBev's group EBITDA rose by 9.5% on the first half of 2010, to BRL5.67bn, while net profits, which were given an extra boost from lower interest costs, increased by 24% to BRL3.95bn.
Castro Neves said: "Overall, we had a quarter in which we registered important margin expansion in order to compensate for a lower revenue growth driven by a softer industry in most regions where we operate. We are also adjusting our cost base for a tougher year in volumes."
He said that AmBev still plans to invest BRL2.5bn in its domestic operations this year. An expected 7.5% real-terms increase in Brazil's minimum wage should boost beer sales in early 2012, he added.
Elsewhere, Labatt in Canada continued to cause AmBev difficulties, with the division's volumes down by 8% for the half-year and net sales down by 9%, to BRL1.67bn.
In the second quarter, AmBev's net profits rose by 20.8% to BRL1.84bn, with net sales up by 2.3% to BRL5.81bn. EBITDA rose by 7% to BRL2.58bn.
For the company's announcement, click here.
The second part of January's management briefing sees Spiros Malandrakis and Zsuzsa Szilagyi, alcoholics drinks analysts at Euromonitor International, turn their attention to beer and cider. What doe...
Pete Brown is back, refreshed, raring to go, and pondering the future. "Which way will beer go in 2012?", he asks the tea leaves....
SABMiller's Chinese joint-venture, CR Snow Breweries, could get a second chance to dig its claws into Kingway Brewery and mount a stronger challenge to Tsingtao in the country's Guangdong province....
I can't help but feel slightly bemused by the furore surrounding a report that Anheuser-Busch InBev paid a communications agency to change details on a Wikipedia page for one of its brands....
- The category today - Scotch Whisky I
- Protein interest offers drinks opportunities - NPD
- Today's Market Trends - Scotch Whisky II
- Boom time for soft drinks in West Europe?
- Tomorrow's Market Trends - Scotch Whisky III
- Analysts clash over AB InBev SAB Brexit impact
- Pernod switches Travel Retail Europe op's director
- AB InBev unveils Stella Artois three-packs
- Rum "yet to maximise" GTR potential - Bacardi
- Beam Suntory names CFO, makes structural changes
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends
- Global RTD insights - market forecasts, product innovation and consumer trends
- Keurig Green Mountain in Hot Drinks (World)
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends