Brazil: Ambev’s Q4 adjusted net profit up 7.5% despite decline in total volumes

Brazilian brewer Ambev on February 26 reported a 7.5% increase in its fourth-quarter adjusted net profit despite a decline in total volumes, driving its shares higher even as it flagged that volatility will "remain a reality" in 2025.

Ambev is one of Brazil's biggest firms and has large operations in the Americas. It is a subsidiary of Anheuser-Busch InBev, the world's largest brewer by volume, which reported group results earlier in the day.

Ambev posted an adjusted net profit of 5.02 billion reais ($874.63 million) in the October-December period, it said in a securities filing, a 7.5% year-on-year rise driven by higher core earnings and better financial results.

Total volumes, which declined 3.2% in the period, were affected by softer market conditions in Argentina and adverse weather in Brazil. Organic net revenue was still up 4.2% to 27.04 billion reais, with growth in most business units.

Assuming current foreign exchange levels and commodity prices, Ambev said it expects the cash cost of goods sold per hectolitre in its key Brazil Beer segment to grow between 5.5% and 8.5% this year.

"In 2025, volatility will remain a reality and we expect to face more input cost pressure than in 2024," Ambev said in its statement.

"Nonetheless, we will continue to work to find opportunities and enhance efficiency, pursuing our ambition of expanding consolidated margins."

Sao Paulo-traded shares in Ambev rose more than 5% in early trading, making it the biggest gainer on local benchmark stock index Bovespa which was up 0.4%.

Analysts at JPMorgan highlighted stronger margins in Ambev's international division. "We think the market should welcome these results, despite the weak Brazil beer top line. It should also bring upside risk to our and consensus figures," they said.

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