Brazil: AmBev expected to post 56% jump in profit for 2Q 2006

AmBev, the Brazilian unit of Belgian brewing giant InBev, is expected to post a 56 percent jump in quarterly profit next week thanks to strong beer sales in Brazil and improved profitability at its Canadian unit, Reuters announced August 09.

Six analysts surveyed by Reuters forecast, on average, a net profit of BRL476.7 million ($218.7 million) in the second quarter, up from BRL305.2 million in the same period of 2005.

But that would be lower than a profit BRL655.9 million in the first quarter of 2006, when an unusually hot summer in the Southern Hemisphere helped fuel beer sales in Brazil, AmBev's core market.

AmBev, Latin America's largest brewer, is slated to report earnings before the Sao Paulo Stock Exchange opens on August 14.

AmBev, short for Companhia de Bebidas das Americas, has long dominated Brazil's beer market. Besides Brazil's top three brands - Skol, Brahma and Antarctica - it also owns the Canadian brewery Labatt, Quinsa in Argentina, and has plants in several other Latin American countries.

Second-quarter net revenue is expected to rise by 6.2 percent from a year ago to BRL3.93 billion reais, driven by healthy sales in Brazil despite tough competition.

Its main rivals in Brazil are Schincariol and Cervejaria Petropolis, both privately owned, and Cervejarias Kaiser, which was bought earlier this year by Mexico's FEMSA.

On the operating level, earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as EBITDA, is expected to rise 12.7 percent from a year ago to BRL1.6 billion.

11 August, 2006