Brazil: Ambev sees lower recurring net profit last year

Ambev SA, Latin America’s largest beverages firm, will see its earnings before interest, taxes, depreciation and amortization in Brazil growing at a faster pace in 2019, its Chief Financial Officer told analysts on February 28.

The Brazilian unit, the largest one in terms of revenues, posted an EBITDA of 11.39 billion reais ($3.04 billion) in 2018, up 3.3 percent from the previous year.

The Latin American unit of Anheuser Busch InBev reported a lower recurring net profit for last year, as higher costs offset higher revenue.

Fourth-quarter recurring net income was 3.724 billion reais ($999 million), Latin America’s largest beverages firm said in a statement, down 17.3 percent from a year earlier.

Before one-off items, net income rose 5 percent.

Ambev said that higher revenue per hectoliter more than compensated for a drop in fourth quarter volumes. It said net revenue was 16 billion reais, up 6.6 percent year-on-year.

However, the cost of goods sold rose by 21.3 percent, to 6.05 billion reais which Ambev said was the result of inflationary pressure in Argentina and higher commodity prices.

The brewer said its cost of goods sold per hectoliter is likely to rise further in Brazil, forecasting an increase of 15 percent for 2019 due to currency depreciation and higher commodity prices.

($1 = 3.7285 reais)

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