July 29, 2016 / 12:12 PM / 2 years ago

Brazil's Ambev reports 18 pct drop in 2nd quarter profit

RIO DE JANEIRO, July 29 (Reuters) - Ambev SA, a subsidiary of beverage giant Anheuser Busch Inbev SA, booked a weaker second-quarter profit on Friday and gave up on expanding Brazilian sales this year as demand stagnates in Latin America’s largest economy.

Ambev now forecasts its Brazilian net revenue this year to be unchanged from 2015, down from a previous estimate of single-digit revenue growth, according to a securities filing.

Brazil’s largest brewer reported an 18 percent drop in net income from a year earlier to 2.046 billion reais ($623 million) due to higher operating, financial and tax expenses.

Financial expenses more than doubled to 900 million reais due to losses on currency hedges and interest expenses related to a sale option on an investment in the Dominican Republic.

Net sales, or total sales minus sales taxes, rose 4.7 percent to 10.377 billion reais on growth in the Caribbean, Central America and Canada. Earnings before interest, taxes, depreciation, amortization and one-time effects, or adjusted EBITDA, rose 2 percent to 4.205 billion reais.

$1 = 3.2892 Brazilian reais Reporting by Jeb Blount and Alberto Alerigi Jr.; Editing by Brad Haynes and Bill Trott

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