Brazil brewer Ambev posts earnings beat on record Q2 volumes

By Gabriel Araujo

SAO PAULO, July 28 (Reuters) - Brazilian brewer Ambev SA ABEV3.SA beat expectations on Thursday with a 4.6% rise in second-quarter net income, boosted by record sale volumes for the period and despite higher costs.

Net income rose to 3.06 billion reais ($583.56 million), way ahead of a Refinitiv poll forecast of 2.11 billion.

Analysts at XP Investimentos praised the results as strong, highlighting a "healthy" price increase - which they said should be cherished at a moment of high inflation.

"We see Ambev's second quarter as key for a positive change in the short/mid-term perceptions, as commodity prices are trending lower," they said.

Ambev, a subsidiary of Belgium's Anheuser-Busch InBev SA ABI.BR , said total sale volumes grew by 6.1% in the period.

"This quarter marked the first time we sold more than 40 million hectoliters in a second quarter," Chief Executive Jean Jereissati said in a statement.

Cost of goods sold per hectoliter, however, jumped 17.8% as high commodity prices continued to affect the key indicator.

Ambev is Brazil's third-largest company by market capitalisation, with its current valuation of 231.18 billion-reais placing it behind only state-run oil firm Petrobras PETR4.SA and mining giant Vale SA VALE3.SA .

The company said the first half performance made it more confident in its ability to deliver organic adjusted EBITDA growth this year over 2021, despite what it called "short-term challenges and volatility".

The brewer's earnings report also showed that Ambev's adjusted EBITDA margin, a closely watched measure of operating profitability, dropped 290 basis points on a yearly basis to 30.8%, but improved from the 30% level of the previous three months.

Net revenue rose 14.5% to 17.99 billion reais, while analysts had expected it to reach 17.39 billion reais.

"For the full year, we continue to expect top line performance ahead of bottom line recovery," Ambev said.

($1=5.2437 reais)
Reporting by Gabriel Araujo; Editing by Jason Neely, Clarence Fernandez and Chizu Nomiyama

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