Brazil brewer Ambev posts Q3 profit beat on local market momentum (updated)

Ambev SA

27/10/2022 11:58

(Adds details, context, analyst comment)
       SAO PAULO, Oct 27 (Reuters) - Brazilian brewer Ambev SA
 ABEV3.SA  on Thursday reported a third-quarter net profit beat
thanks to positive momentum in its home market and reaffirmed an
outlook of growing revenues and EBITDA in the second half by
more than in the first one.
    Ambev posted a quarterly net income of 3.21 billion reais
($596 million), down 13.4% from a year earlier but ahead of
estimates as analysts had forecast it to reach 2.48 billion
reais, according to a poll by Refinitiv.
    The subsidiary of Belgium's Anheuser-Busch InBev SA  ABI.BR 
said that net revenue jumped 11.3% in the period, while volumes
sold increased by 1.3%, marking a new record for a third
quarter.
    "Our Brazil businesses continue to build momentum,
delivering double-digit revenue and EBITDA growth, which more
than offset continued headwinds in some of our international
operations," CEO Jean Jereissati said in a media release.
    Ambev said that its beer business in Brazil was still
benefited by the post-pandemic reopening and posted flat volumes
on a yearly basis, despite a strong showing a year ago.
        On the other hand, businesses in Central America and the
Caribbean had a weak quarter as soaring inflation and supply
chain disruptions continued to take their toll, with costs and
expenses growing on the back of higher commodity and freight
prices, the company said.
  
        Analysts at JPMorgan welcomed the overall results,
highlighting Ambev's Brazil operations by saying beer volumes
exceeded their optimistic expectations and came with a solid
average price increase, showing that the market was resilient.
        They expect a strong fourth quarter ahead as Ambev's
management reiterated its revenues and earnings before interest,
taxes, depreciation and amortization (EBITDA) growth forecast
for the second half, also boosted by the Qatar World Cup.
  
        Ambev is Brazil's fourth-largest company by market
capitalization, behind only oil giant Petrobras  PETR4.SA ,
miner Vale  VALE3.SA  and lender Itau  ITUB4.SA .
  
    ($1 = 5.3849 reais)
 (Reporting by Gabriel Araujo; editing by Jason Neely and Steven
Grattan)
 ((Gabriel.Araujo2@thomsonreuters.com; +55 11 5644 7745;))