By Jeffrey T. Lewis
SAO PAULO--Ambev SA's profit fell in the third quarter from a year earlier as the company's cost of goods sold jumped and financial costs increased even as sales rose.
The Sao Paulo-based company's net income attributable to shareholders fell 8.9% to 2.3 billion reais, equivalent to $403 million, Ambev said Thursday. Adjusted earnings before interest, taxes, depreciation and amortization rose 15% to 5.1 billion reais. Net revenue rose 30.5% to 15.6 billion reais. Sales volume increased 12% to 42.4 million hectoliters.
Ambev is controlled by Anheuser-Busch InBev SA, the world's biggest beer producer, and brews and markets brands including Budweiser, Brahma and Corona. Brazil is Ambev's biggest market, but the company also operates in other countries in the Americas including Canada, Argentina and Chile.
The company reported that sales jumped in the third quarter from the second quarter as governments in markets where Ambev operates eased quarantine restrictions. Brazilian beer sales were helped by government aid payments to the country's poorest residents, and were up 25.4% from a year earlier.
The company's net financial result showed a loss of 1.1 billion reais, compared with a loss of 305.8 million reais in the same quarter a year earlier, as interest costs rose to 539.3 million reais from 393.8 million reais in the year-ago quarter. Losses from hedges increased to 562.7 million reais from 311.7 million reais in the third quarter of last year.
Cost of goods sold jumped 41.9% to 7.4 billion reais, boosted by rapid price increases in Argentina, unfavorable exchange rates and changes in the company's packaging mix, Ambev said.
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