SAO PAULO (Reuters) - Brazilian brewer Ambev ( ABEV ) on Wednesday reported a 7.5% increase in its fourth-quarter adjusted net profit despite a decline in total volumes, driving its shares higher even as it flagged that volatility will "remain a reality" in 2025.

WHY IT'S IMPORTANT

Ambev ( ABEV ) is one of Brazil's biggest firms and has large operations in the Americas. It is a subsidiary of Anheuser-Busch InBev, the world's largest brewer by volume, which reported group results earlier in the day.

BY THE NUMBERS

Ambev ( ABEV ) posted an adjusted net profit of 5.02 billion reais ($874.63 million) in the October-December period, it said in a securities filing, a 7.5% year-on-year rise driven by higher core earnings and better financial results.

Total volumes, which declined 3.2% in the period, were affected by softer market conditions in Argentina and adverse weather in Brazil. Organic net revenue was still up 4.2% to 27.04 billion reais, with growth in most business units.

2025 OUTLOOK

Assuming current foreign exchange levels and commodity prices, Ambev ( ABEV ) said it expects the cash cost of goods sold per hectoliter in its key Brazil Beer segment to grow between 5.5% and 8.5% this year.

KEY QUOTES

"In 2025, volatility will remain a reality and we expect to face more input cost pressure than in 2024," Ambev ( ABEV ) said in its statement.

"Nonetheless, we will continue to work to find opportunities and enhance efficiency, pursuing our ambition of expanding consolidated margins."

MARKET REACTION

Sao Paulo-traded shares in Ambev ( ABEV ) rose more than 5% in early trading, making it the biggest gainer on local benchmark stock index Bovespa, which was up 0.4%.

Analysts at JPMorgan highlighted stronger margins in Ambev's ( ABEV ) international division. "We think the market should welcome these results, despite the weak Brazil beer top line. It should also bring upside risk to our and consensus figures," they said.

($1 = 5.7396 reais)