Brazil: Ambev’s Q1 profit growth of 13% misses analysts’ estimate

Ambev SA, the Latin American unit of beverage company Anheuser Busch InBev NV, missed quarterly profit estimates on May 9 due to the timing of Carnaval and rising competition in Brazil from Heineken NV.

In a securities filing, the Sao Paulo-based brewer posted fourth quarter net income of 2.598 billion reais ($729 million), up 13 percent from the same period a year ago, but below a Reuters consensus estimate of 3.02 billion reais.

Ambev shares fell nearly 2 percent in Sao Paulo to a two-month low.

Soft drink volumes in Brazil fell 19.4 percent from a year earlier, while beer volumes fell 8.1 percent, hurt by the timing of and weather around the Carnaval holiday, according to Ambev.

“The beer sector as a whole contracted during the quarter, with Carnaval falling near the beginning of February and a cooler climate,” said Chief Financial Officer Ricardo Rittes in written remarks in the earnings release.

Last month, Heineken reported double-digit sales growth in Brazil during the first quarter, compared to a year earlier.

Rittes suggested that the soccer World Cup in June would help to lift Brazilian sales in the second quarter.

First-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 10.1 percent from a year earlier to 4.639 billion reais, slightly below an average estimate of 4.78 billion reais.

Outside Brazil, results were stronger. Volumes in the southern Latin America region jumped 5.7 percent, while profit and EBITDA also grew significantly. The Central American region also posted significant growth in top line, EBITDA, and profit.

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