Brazilian brewer Ambev reported an 11% drop in third-quarter net profit on Thursday, hurt by higher tax provisions in its home market.
The drop sent shares down as much as 3% though the decline was in line with market forecasts.
Ambev said its expenditure, including income tax and social contributions in the quarter, totalled 1.1 billion reais $190 million, “more than offsetting growth in adjusted (core earnings) and an improved net financial result.”
The AB InBev subsidiary made profit of 3.57 billion reais as volumes slipped 0.6%.
In a securities filing, the company said, “We remain focused on executing our commercial strategy and are confident in our preparedness for the summer seasons in South America.”
'Slightly Negative'
Ambev’s volumes in Brazil rose 1.3% driven by a 3.4% boost in non-alcoholic drinks like Gatorade and Red Bull.
Premium and super-premium beer brands including Corona, Spaten and Original saw a slight increase of 0.6%.
Itau BBA analysts called the results “slightly negative.”
They said in a note that, while overall figures came roughly in line with their estimates, “the soft top-line dynamics in (beer sales in Brazil), driven by both volumes and prices, could set the tone for the investment thesis in the short term.”
In South America, a 7.7% dip in volumes was influenced by inflation in Argentina, which negatively impacted consumer demand.
However, positive performances in Bolivia and Chile provided some offset.
Core earnings, or earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 7% to 7.06 billion reais.
This was just above the forecast 7.03 billion reais.
The brewer announced in August that Carlos Eduardo Lisboa would take over as chief executive next year, replacing Jean Jereissati Neto, who is moving to the company’s Middle Americas unit.
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