(Adding comments from executives, analysts, sharing)
By Gabriela Mello
SAO PAULO, July 30 (Reuters) – Brazilian brewer Ambev SA sales have recovered from April’s lows, executives said on Thursday, expecting further increases after the coronavirus crisis halved its quarterly earnings.
The pandemic began hurting operations in March when the government quarantined the limited distribution of alcoholic drinks, including the brands Budweiser, Corona and Stella Artois.
“We are quickly adapting to the changes brought by COVID-19 in terms of consumption and volume sequentially improving since April,” Chief Executive Jean Jereissati told analysts about earnings calls.
The Latin American unit of Anheuser Busch InBev reported second-quarter net profit of 1.27 billion reais ($ 245.65 million), down 51.4% from the year-ago period. Margin adjusted before tax, interest, depreciation and amortization (EBITDA) margins fell to 28.8% from 38.6%.
Jereissati said Ambev expects a “V-shaped” recovery in volume and income, with a slower recovery in margins because market conditions tend to remain difficult in the second half.
“One of our biggest challenges going forward is how to increase profitability and this will not happen overnight because the future remains uncertain and consumption is still volatile,” Chief Financial Officer Lucas Lira said.
The company is stepping up efforts to cut discretionary costs while focusing more on customers, Lira added.
With bars and restaurants closed, Ambev diverted resources to other sales channels such as mother and child shops and e-commerce, including the Ze Delivery application.
“In a short time, Ambev has rediscovered itself using a digital sales initiative, keeping stakeholders close and the facility fully operational,” analysts at Credit Suisse wrote in a report, raising its stake to “outperform.”
Ambev shares fell 3% in the mid afternoon to 14.68 reais after rising as much as 5% at the opening.
The Brazilian subsidiary of AmBev, of which AB InBev has 61.9%, operates in 16 countries in America, including Argentina and Canada.
$ 1 = 5,1700 reais Reporting by Gabriela Mello; editing by Jason Neely