Brazilian brewer Ambev posts Q1 earnings beat as volumes grow

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Bottle of beer is seen next to a man on the terrace of a bar in Sao Paulo

SAO PAULO (Reuters) – Brazilian brewer Ambev SA’s first-quarter net income rose 29.1% from a year earlier as volumes increased, driven by its domestic and South American units, it said on Thursday, beating estimates from analysts polled by Refinitiv.

The bottom line came in at 3.53 billion reais ($717.51 million), ahead of an estimated 2.79 billion reais, also boosted by the company’s financial result.

“We delivered volume and EBITDA (core profit) growth despite the industry’s volatility in several markets and even as costs remained under pressure,” Chief Executive Jean Jereissati said in a statement.

Ambev’s quarterly net revenue rose 10.8% to 18.44 billion reais, slightly above an average market estimate of 18.03 billion reais.

Volumes grew 3.6%, a figure the subsidiary of Belgium’s Anheuser-Busch InBev SA viewed as positive given the new wave of COVID-19 infections driven by the Omicron variant and the postponement of Brazil’s Carnival parades for the second quarter.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased 3.7% to 5.52 billion reais, roughly in line with estimates, but the adjusted EBITDA margin fell 200 basis points to 30%.

“As expected, cost pressures remained in place … due to higher commodities prices, which were already projected,” Ambev said in a securities filing.

($1 = 4.9198 reais)

(Reporting by Gabriel Araujo; Editing by Mark Potter)