Ambev (ABEV3) earns R$3.712 billion in the 3rd quarter, up 57.4%; analysts see very strong results and ADRs rise 5%

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Ambev (ABEV3) reported net income of R$3.712 billion in the third quarter of 2021 (3Q21). The result represents a growth of 57.4% compared to the same period in 2020.

According to the company, the result is due to the strong commercial performance in 3Q21, reaching the highest consolidated volumes ever recorded in a third quarter, resulting in strong growth in net revenue.

The result was well regarded by analysts (see further analysis below), with ADRs (in practice, securities traded on the New York Stock Exchange) rising 5.22%, to US$ 2.82, at 8:30 am (time on Brasília) this Thursday (28) on the New York Stock Exchange.

Net revenue totaled R$45.655 billion in the quarter, up 7.7% over the same period last year.

Earnings before interest, taxes, depreciation and amortization (Ebitda, its acronym in English) grew 7.8% in comparison with the same stage of 2020, totaling BRL 5.468 billion.

The adjusted Ebitda margin reached 29.6% in the 3rd quarter of 2021, an increase of 2.9 pp compared to the same quarter of 2020.

The company’s gross margin was 50% between July and September 2021, down 2.4 percentage points.

The net financial result was R$876.2 million in 3Q21, an improvement of R$268.6 million compared to 3Q20.

Cash generation from operating activities was R$6.398 billion compared to R$7.079 billion in 3Q20 (-9.6%).

In the year, cash generation totaled R$ 11.075 billion against R$ 10.462 billion in the same period last year (+5.9%).

On September 30, 2021, Ambev’s net cash was R$ 16.761 billion, an increase of 19.7% compared to December 31, 2020.

Analysis

Bradesco BBI highlighted that Ambev’s 3Q21 results were very strong and expects a positive reaction from the shares due to this result. That’s because the Ebitda was 8% above the consensus and the company reported a growth in the volume of Brazilian beer of 7%.

Credit Suisse already rated the company’s sales performance in the quarter as starring.

“AmBev once again outperformed sales from a top-notch sales execution, which allowed its volumes to hit record levels for the quarter, all the more impressive considering last year’s tough comparisons,” says the Swiss bank.

Bradesco BBI maintains an outperform valuation for Ambev shares (ABEV3) and a target price of R$21.00, compared to the quotation on Wednesday (27) of R$15.22. Credit Suisse also maintains an outperform valuation for Ambev shares (ABEV3), with a target price of R$ 18.50.

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About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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