Beer consumption falls in Brazil and Ambev sells less in Q2

Ambev decreased 1.3% in sales volume of beer in Brazil from April to June this year compared with the same period last year. The fall, according to the company, was lower than the industry average of beer. The drinks manufacturer cited data from Nielsen pointing out that, in the same period, all the breweries shrunk volumes in 2.7%.
The adjusted net profit of Ambev in the second quarter was R $2.141 billion, 2.4% lower than in the same period in 2016. According to the report of the company, the result was impacted by the devaluation of the Brazilian real and the cash generation (Ebitda) operation. The positive impact has been the reduction of financial expenses of the manufacturer. In the first six months of the year, the indicator retreated 12.5%, from R $5.045 billion in the first half of 2016 to R $4.457 billion in the same period to 2017.
Ambev''s net revenue increased 4.8 percent in the second quarter, driven by the results of all international operations of the company: Latin America South (LAS) (+ 36.2%), Central America and Caribbean (CAC) (+ 6.9%) and Canada (+ 1.4%). In Brazil, the result fell 4.1 percent, impacted by the fall of 4.7% in total sales volume.
Ambev held that the beer segment "mainstream" (which involves the most popular brands) continued to be pressured by "macroeconomic and political environments in adverse and volatile". Already the premium beers segment, according to the company, grew between 17% and 19% in the quarter. Between April and June this year, Ambev posted a volume sold of 17,430,000 hectolitres.
The worsening in the beer market contributed the fall total of 4.7% in the total volume of drinks sold by Ambev in the second quarter of 2017 compared with the same period last year. From April to June, the company sold a total of 22,979,000 hectolitres.
With that, net of Ambev in the Brazilian market retreated 4.1 percent in the quarter compared to the previous year, reaching R $5.325 billion. The cost of goods sold (COGS) in Brazil rose 3.8%, to R $2.141 billion.
Considering only the beer business, revenue in the quarter reached R $4.546 billion, a 3.3% decline compared to the previous year. The COGS of beer increased by 5.3% over the same period, to $1.721 billion.
Soft drinks. Already the volume of soft drinks and other non-alcoholic drinks fell 14.1 percent in the second quarter, reaching 5,548,000 hectolitres between April and June this year. Ambev has stated that, in this market, your performance was worse than average. The company reported that, according to Nielsen, the soft drink industry fell 9.7%.
The company found that its products have lost space for lower-priced brands. "Consumers continued to be pressured by a low disposable income, migrating the consumption for B brands, powder juices or even purified water", says the company comment on quarterly results.
The IRS of Ambev with soft drinks and non-alcoholic retreated 8.5% compared to the previous year, reaching R $778,600,000. COGS fell 2.2%, to R $420,600,000.
Result abroad. Ambev''s operations in countries of the region called Latin America South (LAS) showed growth of 8.5% in the volume of drinks sold in the second quarter of 2017 compared with the same period last year. From April to June this year, the company sold 6,729,000 hectolitres of beverages in the countries.
According to Ambev''s comment on the results, the performance in the region was driven by a resumption in Argentina, a country where sales of beer grew by more than 20%, according to the company. The company CITES advances in Paraguay and Uruguay.
The results of Ambev ceased to consolidate operations to Colombia, Peru and Ecuador, transferred as a result of an agreement with the parent company AB Inbev.
Consolidated net revenue of the business unit was discharged 15% compared to same period in 2016, reaching the R $2.086 billion.
The cost of goods sold (COGS) in the region increased by 18.3%, to R $861,200,000, as COGS/HL (COGS/hl) advanced 9% to R $128. The adjusted Ebitda rose by 21.3% to R $806,700,000, with 38.7% margin.