Tuesday, November 03, 2015

AmBev will keep in line with inflation adjustment

Ambev will follow a price adjustment policy in line with inflation in Brazil and in other countries in which it operates, informed company executives in Conference calls with analysts.
The manufacturer of beverages surged to 24.6% in consolidated net revenue in the third quarter ahead as compared to the same period last year, totaling R$ 10.745 billion.
The volume of drinks sold stood at 39.98 million hectolitres (100 litres), compared the 39.89 million hectolitres a year before. The volume of beer climbed 4.2 percent, while soda fell 10.2%. According to analysts at Brokerage Factor, Caio Moreira and Juliana Heimbeck, facing a "challenging" macroeconomic scenario, the company was helped by warm weather in the country between July and September, which boosted the sale of beers.
Data from Nielsen show that Ambev has 67.8% of the Brazilian market of beers. Already in soft drinks, the company accounts for 19.6% slice. "We are not satisfied with the result [in soft drinks], but we don't see the third quarter as tendency to our future performance," said the Director in a report.
To minimize the impact of smaller domestic sales this year, Ambev comes intensifying efforts to cost management. Between July and September, the cost of goods sold (COGS)-excluding depreciation and amortization-per hectolitre in Brazil grew 7.6%, below the inflation for the period. Because of this, the company reduced its forecast of a CPV type high for a middle digit of the year.
Yet the financial Vice President of Ambev, Nelson Jamel, said the company can make a revaluation of its capabilities if the São Paulo State Government apply increased about the tax on circulation of goods and services (ICMS) of beer. "We're going through some extremely challenging, with increase of a number of costs. If it is approved, will certainly have an impact on prices and sales volumes, "he said.
The Government of São Paulo discusses in the Legislative Assembly a tax increase of 18% to 25% later this year.
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