E-Malt.com News article: 1786

Companhia de Bebidas das Américas (AmBev), world’s fifth largest brewer and Brazil’s leading beverage company, posted on November 10 a third quarter consolidated net profit of 340.4 million reais ($119 million), 32 % weaker than in the year-earlier period. However, consolidated earnings before interest, taxes, depreciation, and amortization rose to 777.8 million reais from 644.4 million reais in the same three-month period in 2002 (up 20.7%), AmBev said in a statement. Consolidated Operations are comprised of AmBev’s Brazilian Operations and its International Operations, which include AmBev’s 43.3% economic stake in Quinsa and other International Operations (currently Venezuela, but beginning in the fourth quarter 2003 also Guatemala and Peru).

AmBev had already said third-quarter beer sales in Brazil were down 12.3 % from a year earlier. Its share of the Brazilian beer market, where AmBev makes most of its revenue, dropped to 66.1 % from 70.1 % at the end of June. But a hike in the price of beer, cost savings, more direct distribution and a higher proportion of sales of premium brands helped offset weaker sales, currency hedge costs and higher prices for ingredients such as barley and corn, AmBev said. The results showed that while the cost of goods sold rose 55.4 million reais in the quarter, the company saved 54.3 million reais in sales and administrative costs. "As we expect several actions to mature in the fourth quarter 2003, we maintain our commitment to generate real savings of between 200 million reais and 250 million reais in 2003 versus 2002," AmBev said in its results statement.

Consolidated third-quarter net sales of 2.0 billion reais were almost 13 % higher than in the same period last year, with Brazilian revenue growing faster than overseas sales.

AmBev is the world's fifth largest brewer. It has a leading position in the Brazilian beverage industry with approximately 70% of the beer market and 17% of the soft drinks segment. Its leading beer brands are Skol, Brahma, Antarctica, and Bohemia. AmBev is growing in other South American markets such as Argentina, Venezuela, Uruguay and Paraguay, and is expanding to Central America and Peru in 2003.

The Brazilian beer market is the fourth largest in the world and the largest in Latin America, with annual consumption of 85 million hectoliters in 2002, according to Euromonitor. The Brazilian beer market is characterized by a high proportion of on-premise consumption (outdoor bars and restaurants) in returnable bottles. Segments such as take home and super premium represent a small percentage of the market, therefore new opportunities for higher per capita consumption exist. AmBev's distribution network reaches over 1 million points of sale in Brazil.


12 November, 2003