The Brazilian beverages manufacturer AmBev (NYSE: ABV) reported declining margins, but EBITDA growth of (+6.4%) for the third quarter. The company reported a recovery from the 70pbs loss of beer market share in July, ending the the quarter with a market share flat versus 3Q '07.
AmBev Brazil's consolidated result showed a 7.2% improvement in organic net revenue, and organic EBITDA up 8.8%, to R$1.297 million (US$576 million), with an EBITDA margin of 45.6%.
AmBev's soft drink division CSD & NANC performed well in the third quarter, gaining 80bps market share compared to last year, arriving at 17.8% at the end of the period.
Subsidiaries Quinca, and AmBev's North American operations reported EBITDA gains of R$265.7 million (US$118 million), and R$395.3 million (US$175.7 million) respectively. Subsidiary HILA-ex reported an EBIDA loss of R$32.8 million (US$-14.6 million) for the quarter, impacted negatively by difficult conditions in Venezuela.
Dividends and IOC totalled R$987.4 million (US$439 million) in 3Q '08. In addition, the company announced a further payment amounting to R$839.6 million (US$373 million) in dividends and IOC which was paid beginning on October 13th, 2008.
Net Other Operating Expenses were R$78.4 million (US$34.8 million) for the period, compared to AR$335 million in 3Q '07. This was affected by a translation gain from foreign investments of R$298 million (US$132.5 million), compared from a loss of R$68.6 million (US$30.5 million) in 3Q '07.
Net financial result was affected positively by R$301.8 million net gains from derivatives instruments, compared to a zero effect from derivatives last year. This was offset by higher expenses on Reais denominated debt (R$196 mln, from R$85.8 mln in 3Q '07), as well as a R$343 million loss on foreign currency denominated debt, compared to a R$77.3 million gain in 3Q '07.
AmBev's net financial result arrived at R$286.4 million (US$127.3 million), which is an 8.6% improvement YoY.
The company's consolidated balance sheet at the period ended September 30, 2008, stood at R$9.4 billion current liabilities, R$8.2 billion long-term liabilities, and total shareholders' equity of R$16 billion (US$7.11). Total assets amount to R$33.88 billion (US$15 billion).
At the current price of R$79.00, AmBev's shares (Sao Paulo: AMBV3) are down (-42.5%) over the last twelve months. The market cap is US$25.5 billion, P/E is 19.00, and dividend yield 4.94%.
AmBev's ADR ratio is 1:1.
The company's latest interim statements can be found in our download section.