MEXICO: Arca Continental Q1 sales flat, volumes slide as Mexico tax bites
- Q1 net profits up 6.6% to MXN1.2bn (US$91.7m)
- Net sales flat at MXN13.4bn
- Operating profits (EBITDA) up 7.3% to MXN2.7bn
- Volumes slip 2.9% to 293.4m unit cases
Arca's bottom line has stayed strong despite pressure in its core market of Mexico
Arca Continental has reported a drop in first-quarter volumes as Mexico's soft drinks tax began to bite, but the group's profits were up.
The Mexico-based firm, Latin America’s second largest Coca-Cola bottler, said today (30 April) that net profits in the three months to the end of March rose by 6.6% to MXN1.2bn (US$91.7m). Net sales in the period were flat at MXN13.4bn.
Operating profits in the three months rose by 7.3% to MXN2.7bn. However, volumes slid by 2.9% to 293.4m unit cases.
Mexico, Arca's core market, introduced a tax of MXN1 (US$0.08) per litre of “sugar-sweetened” beverage in January.
Francisco Garza Egloff, Arca’s CEO, said the company had been able to mitigate the effects of the tax in Mexico through “continual investment” and “constant efficiency” in its operations.
The company also announced today that it has acquired a majority stake in Ecuador dairy products firm Holding Tonicorp, as part of a joint venture with the Coca-Cola Co, earlier this month. Tonicorp is made up of the companies Industrias Lácteas Toni, Heladosa, Plásticos Ecuatorianos, Dipor, Cosedone and Fabacorpsa.
To read the company's full statement, click here.
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