S&P Raises Outlook On AmBev To Positive On Strong Cash Flow

Date : 12/13/2010 @ 5:39PM
Source : Dow Jones News
Stock : Ambev S.A. American Depositary Shares (Each Representing 1 Common Share) (ABEV)
Quote : 6.86  0.0 (0.00%) @ 9:12AM

S&P Raises Outlook On AmBev To Positive On Strong Cash Flow

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Standard & Poor's Ratings Services increased the chances of an upgrade for Companhia de Bebidas das Americas (ABV, AMBV4.BR), the Brazilian brewer also known as AmBev, should it maintain its prudent financial strategies and resilient cash flow.

In raising its outlook on the company to positive, the agency said AmBev has leveraged diversity of its portfolio while sticking to strict financial practice, which significantly offsets risks linked its revenue generation in some volatile Latin American economies.

It also said an upgrade of AmBev, which is Brazil's largest producer of beer and soft drinks, would depend on an upgrade of its parent, Anheuser-Busch InBev NV (BUD, ABI.BT). Last month, S&P also raised its outlook on the parent company to positive.

S&P currently has AmBev rated at BBB+, three notches above junk territory.

In its most recent quarterly results, the company reported that strong beer sales in its home country drove an increase in profit.

AmBev's American depositary shares closed Monday up 0.7% at $142.32 and weren't active after the S&P announcement. The ADSs have risen 41% so far this year.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com


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