October 26, 2017 / 9:29 AM / 2 months ago

Brazil's Ambev beats Q3 profit estimates

SAO PAULO/BRASILIA, Oct 26 (Reuters) - Ambev SA, the Latin American unit of Anheuser Busch Inbev NV, on Thursday reported a third-quarter adjusted net income of 3.24 billion reais ($1 billion), up 1.2 percent from a year earlier.

Profit beat an average forecast of 2.64 billion reais in a Reuters survey of analysts. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) rose 13.8 percent to 4.55 billion reais versus a consensus estimate of 4.72 billion reais.

Ambev’s profits have suffered in recent quarters on weak demand and swings in commodity prices such as aluminum, grains, and sugar, forcing the company to increase hedging. Competition in Ambev’s core Brazil market has also stiffened since Dutch rival Heineken NV roughly doubled its presence by acquiring Kirin Holdings’ local operation.

Ambev’s sales volumes in the third quarter fell 1.0 percent from a year earlier to 38.4 million hectoliters, as Brazilian consumption continued a sluggish recovery from the country’s worst recession in more than a century.

The average cost of products sold, a measure of the cost of producing and selling a beverage, increased 7.4 percent from the same period a year before. ($1 = 3.2329 reais) (Reporting by Gram Slattery and Jake Spring; editing by Alexander Smith)

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