October 25, 2018 / 12:04 PM / a month ago

Brazil's Ambev latest victim of Argentine inflation in third quarter

SAO PAULO, Oct 25 (Reuters) - Ambev SA, the Latin American unit of Anheuser Busch InBev, posted mixed third-quarter results on Thursday, as rising inflation in Argentina and increased advertising costs took major bites out of the firm’s margins.

In a securities filing, Latin America’s largest beverage firm posted a net profit of 2.89 billion reais ($774 million).

While that was above the Reuters consensus forecast of 2.68 billion reais, earnings before interest, taxes, depreciation, and amortization (EBITDA) missed forecasts, coming in at 4.45 billion reais, well below a Reuters projection of 5.11 billion.

In the quarter, the firm said EBITDA took a 574 million-real hit, as the firm adopted hyperinflationary accounting methods in Argentina, in accordance with international standards.

Argentina, Latin America’s third-largest economy, has suffered from repeated crises of confidence in 2018. After the worst drought in 60 years withered grain exports, a run on the peso halved the currency’s value against the dollar, prompting the country to enter a $57 billion standby financing agreement with the International Monetary Fund.

Inflation in Argentina is expected to end the year at 44 percent, according to the latest central bank poll.

($1 = 3.73 reais)

Reporting by Gram Slattery; Editing by Bernadette Baum

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