Brazil: AmBev reports financial results with tripled it third-quarter earnings for Q3

AmBev, Latin America's largest brewer reported on November 3rt its third-quarter earnings more than tripled year-on-year as beer sales jumped in Brazil, its main market, where it has nearly 70 percent of all beer sales, according to Reuters.

Companhia de Bebidas das Americas, a unit of Belgian beverage giant InBev , posted net profit of 399 million reais from June to September, compared with 131.7 million reais a year earlier and 305.2 million reais in the second quarter.

The result hit a Reuters forecast based on a survey of five analysts who, on average, had expected net profit would be 384.2 million reais. Shares of the company gained 0.25 percent on the Sao Paulo Stock Exchange after the news, while the benchmark Bovespa index closed 0.65 percent higher.

AmBev, the maker of Brahma and Skol beer said sales volumes in Brazil rose 3.4 percent from July to September of 2005 compared with the same period last year.The performance lead AmBev to raise to 7 percent from 6 percent its forecast for the growth of beer sales volumes in Brazil this year. Last month, the company said total volumes of beer sales rose 4.4 percent in the third quarter from a year earlier.

AmBev's director of Investors Relations, Pedro Aidar said beer sales volumes will likely grow 1 percent to 2 percent in the fourth quarter in Brazil. He added volumes are expanding at a slower pace because they recouped sharply in the end of 2005, reducing the potential upside on sales this year.

Consolidated net sales, including Brazilian and international operations, totaled 3.91 billion reais in the third quarter, above the 2.95 billion in the same period a year ago. Cashflow as measured by EBITDA, or earnings before interest, taxes, depreciation and amortization, was 1.5 billion reais in the third quarter, up from 1.1 billion reais in the same period a year ago.

EBITDA margin, a key gauge of the company's profitability, rose 1 percentage point to 39.5 percent on the year.

Brazil accounted for 59.5 percent of AmBev's consolidated sales and for 64.1 percent of its cashflow."Operations in Brazil were the highlight. Sales volumes for beer continued growing and net revenue per hectoliter rose 9.4 percent in the nine months ending in September from the same period a year earlier," the company said in a statement.

Net sales for Canada's Labatt Brewing Co, acquired by AmBev last year, grew 1.9 percent to 558.9 million Canadian dollars in the third quarter from a year ago, while the cost of sales decreased 5.2 percent.

Labatt's EBITDA rose 13 percent from the year ago to 233.5 million Canadian dollars while the EBITDA margin reached 41 percent, 4 percentage points higher than in the third quarter of 2004.
Labatt has been reducing costs though job cuts and other savings since it came under AmBev's control.

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