Ambev SA (ADR)(NYSE:ABEV) announced financial results under IFRA for the recently concluded 3Q2015. As per the reports, the biggest highlight was but the excellent growth of 13.2% in its top line results, driven by business expansion in markets like Canada and Brazil.
Insights of Matter
When it comes to volume growth, Brazilian market produced 1% growth, Canada 3% growth, and CAC 16.1% growth; however, this positive performance was offset by below-average performance (6.4% decline) in LAS market. Net revenue per hectoliter increased by 13% due to excellent direct distribution techniques in Brazil, the inclusion of premium mix across most of the operations and many other revenue management initiatives.
The cost of goods sold rose 14.1%, whereas cash COGS was up 13.7%. In terms of per hectoliter, the cash COGS rose by 13.5% due to unfavorable currency hedges, inflationary pressures, and product mix. It was partially offset by productivity gains, procurement service initiatives, and better commodity hedge initiatives.
The selling, general and administrative (SG&A) expenses increased 14.3% during the quarter, mainly because of increased focus on direct distribution in Brazil, higher sales and marketing expenses, and higher administrative cost. Normalized EBITDA of the company touched a significant milestone of R$ 4,992 million, up 11.7% from the previously announced figure. The EBITDA margin for the quarter was 46.5%, down 60 bps, while the gross margin was 65.3%, down 20 basis points.
The normalized net profit of the company was R$ 3,087 million for the quarter, 6.3% higher than the NP reported by the company during the same period in the previous year. This margin could be much better than 6.3%, but increased tax rate and high net interest expenses offset company’s net profit. Net profit for the year (to date) was up 15% due to positive business flow in different markets.
The senior management team of the company is delighted to announce these results and hopes that the coming quarters will prove to be more beneficial for the company.
