Brazilian beer giant,
Companhia de Bebidas das America
), also known as AmBev, reported robust fourth-quarter 2012
normalized earnings of R$1.19 per share, substantially beating
the prior-year quarter's earnings of R$0.98 a share by 22.2%. The
results were primarily driven by solid top-line performance,
improved margins and lower tax rate.
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In the U.S. dollar terms, earnings came at 58 cents per share,
surpassing the Zacks Consensus Estimate of 35 cents per share.
For the full year, this Zacks Rank #3 (Hold) company reported
normalized earnings per share of R$3.38, up 22.1% from R$2.76
earned in 2011. In U.S. dollar terms, earnings were $1.73 per
share, above the Zacks Consensus Estimate of $1.69.
Reported net sales increased 21.0% to R$10.13 billion compared
with R$8.38 billion in the prior-year quarter. The increase in
revenues was primarily attributable to a 3.2% rise in volumes
across all regions. On an organic basis, total revenue jumped
13.7% from prior-year quarter, on account of a 1.7% increase in
overall organic volumes.
Net sales for full year 2012 jumped 18.8% to R$32.23 billion from
R$27.13 billion reported in 2011. Overall, company volumes rose
2.9% for the year. On an organic basis, net sales witnessed a
12.4% increase while volumes grew 2.0%.
Quarter in Detail
In spite of a 20.5% increase in cost of goods sold, gross profit
escalated 21.2% to R$7.077 billion compared with R$5.841 billion
in the year-ago quarter. Gross profit margin expanded 10 basis
points (bps) to 69.8%.
Selling, marketing and administrative expenses (SG&A),
excluding depreciation and amortization, increased 16.3% year
over year to R$2.21 billion as the company witnessed labor
related inflationary pressures on distribution expenses in
Argentina and Brazil. This was partially offset by lower
administrative expenses in Brazil as well as lower commercial
spending in Canada.
During the quarter, AmBev's normalized EBITDA climbed 22.3% year
over year to R$5.511 billion, while normalized EBITDA margin
expanded 60 basis points to 54.4%.
AmBev ended the year with cash and cash equivalents of R$8.926
billion and shareholders' equity of R$29.923 billion. During the
quarter, the company generated R$5.455 billion of cash from its
operating activities, while full year cash generation amounted to
During the quarter, the company spent R$1.054 billion toward
capital expenditure, bringing the full year capital spending to
R$3.014 billion. Of the full year's capital spend, about R$2.141
billion was invested in Brazil. Moreover, the company paid a
dividend and IOC of R$1.7 billion to its shareholders in October.
Besides AmBev, other beverage-alcohol companies that posted
robust earnings results in the recently reported quarters are
Constellation Brands Inc.