Compañía de Cervecerías Unidas (CCU) has posted “much weaker” results in its second quarter due to soft demand and currency depreciation in Chile and Argentina.
For the period ended 30 June, the Chile-headquartered beverage group posted a 12.7% drop in consolidated volumes compared to the same period a year ago, sinking to 6.01 million hectolitres.
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Net sales tumbled 8.6% to 524.6bn pesos ($555.3m) while EBITDA fell 17.8% to 38.7bn pesos.
However, excluding the non-recurring gain from the sale of a portion of land in Chile, EBITDA stood at 10.05bn pesos, a 78.7% decrease.
Chief executive Patricio Jottar said: “In the second quarter of 2024 CCU’s financial results were much weaker than last year, as they were heavily impacted by two effects; a particularly difficult context for demand in Chile and Argentina, and the depreciation of our main local currencies.
“In Chile, the industries of our core categories decreased, largely explained by adverse weather conditions, with unusual low temperatures and record rain-fall during the quarter.
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By GlobalData“In Argentina, we faced a sharp contraction in the economy and in the beer industry, associated with a challenging context for consumption.”
He added that it is “important to mention that we maintained overall market share in both countries”.
CCU’s portfolio includes beers, soft drinks, hard seltzers, bottled waters, nectars, wines, pisco, rum and cider. It has operations in Chile, Argentina, Bolivia, Colombia, Paraguay and Uruguay.
Net income stood at a gain of 5.04bn pesos. Excluding the gain from the sale of land in Chile, net income was a loss of 15.89bn pesos, versus a loss of 3.9bn pesos last year.
Jottar said in a statement that the Chilean and Argentine peso depreciated 16.8% and 255.1% respectively against the US dollar throughout 2024 compared to 2023.
“In this scenario, under our regional plan “HerCCUles”, further actions in terms of revenue management and costs and expenses control are currently in place. These actions, in a more normalised context for volume growth, should help us to return to the profitability path,” he added.
Despite the plummeting figures, CCU’s share price maintained its position at the close of trading in Santiago yesterday.
This was partly due to the group’s wine division, which “continued in a recovery trend”, with revenues expanding 12%, driven by 11.9% higher average prices.
Volumes showed a “strong recovery” in exports from Chile, which expanded 9.1%, while the Chile domestic market was down 5.4%.
