MEXICO: Arca Continental posts FY profits jump despite weak volumes

By | 20 February 2014

  • FY net profits up 18.3% to MXN5.97bn (US$450.5m)
  • Net sales up 7.3% to MXN60.36bn
  • Operating profits (EBITDA) up 13.1% to MXN12.81bn
  • Volumes down 0.4%
Arca saw Q4 volumes dip

Arca saw Q4 volumes dip

Arca Continental has posted a dip in full-year volumes as CSD consumption fell, but the company still saw profits surge.

Latin American's second-largest Coca-Cola bottler said yesterday (19 February) that it boosted net profits in calendar 2013 by 18.3% to MXN5.97bn (US$450.5m). Net sales were up 7.3% to MXN60.36bn while operating profits (EBITDA) rose by 13.1% to MXN12.81bn.

Volumes dipped by 0.4% in the year, with CSDs, which account for 75% of Arca's volumes, falling by 1.4%. The performance marked a sharp turnaround in the category, after sparkling volumes in 2012 jumped by 17.6%.

Q4 results were similar, with net profits up 18.4% to MXN1.28bn and net sales rising by 5.4% to MXN15.31bn. Operating profits (EBITDA) jumped by MXN3.25bn in the three months to the end of December.

Volumes tailed off in the quarter, slipping by 1.5%, causing concern among analysts of trouble ahead. JP Morgan's Alan Alanis said the volumes drop “may lead to pessimism” over 2014's full-year estimates, especially considering a recently-passed sugar tax in Mexico.

Looking ahead, Arca CEO Francisco Garza Egloff said: “In 2014, under a challenging business climate, the actions taken in recent years to improve various areas of our business will allow us to increase our competitiveness and remain well-positioned to capitalise on new opportunities for profitable growth.”

To read the company's full results, click here.

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