Brazil: Ambev reports 15.2% decline in Q2 net profits

Brazilian brewer Ambev on August 3 reported a 15.2% decline in second-quarter net profit, narrowly missing market forecasts, but said it expects cost pressures this year to be milder than previously anticipated.

The subsidiary of Belgium's Anheuser-Busch InBev posted profit of 2.60 billion reais ($540.34 million), below the 2.68 billion reais average estimate of analysts polled by Refinitiv.

Revenue rose 20% from the same period a year earlier to 18.9 billion reais, as cost pressures continued to ease but missing the 19.80 billion reais consensus view.

Earnings before interest, tax, depreciation and amortization (EBITDA) grew in all business units, though sales volume declined 2.2%.

"Our top-line performance remained resilient and cost pressures continued to decelerate leading to bottom-line growth," CEO Jean Jereissati said in a statement.

Ambev said commercial momentum continued to be led by the Brazilian market. Still, Brazil beer volume fell 2.5%, due to declining beer and soft drinks industry-wide sales and the comparison with last year's s strong post-pandemic recovery.

Businesses in Central America and the Caribbean "continued sequential improvement" despite volumes being down 2.8% driven mostly by Panama, and with a slight decline in the Dominican Republic, the brewer said.

The company said it remained focused on "delivering consistent and continuous improvement in terms of growth and profitability despite the short-term volatility in many of our markets".

Ambev revised down its full-year outlook for the cost of goods sold (COGS) per hectoliter, saying that some factors influencing that metric, such as inflation and commodity prices, were doing better than initially expected.

The brewer now forecasts COGS to grow between 2.5% and 5.5% this year, down from its previous estimate of 6.0% to 9.9%.

Ambev is Brazil's fourth-largest company by market capitalization, behind oil giant Petrobras, miner Vale and lender Itau.