MEXICO: FEMSA thanks beer exports for healthy Q3 rises

By | 28 October 2009

Fomento Economico Mexicano (FEMSA) has posted a strong lift in profits for its third quarter.

The Mexican drinks firm, whose Coca-Cola FEMSA unit reported its quarter-three figures yesterday (27 October), said earlier today (28 October) that net profits for the three months to the end of September leapt by 46% on the corresponding period in 2008 to MXN3.74bn (US$280.2m).

Sales in the quarter were up by 21.4% to MXN50.65bn, while operating profits climbed by 27% to MXN7.22bn.

For the first nine months of this year, profits were riding 10% up on a year earlier at MXN8.96bn, as sales cycled 19.9% up at MXN142.92bn.

The company's brewing unit, FEMSA Cerveza, saw domestic volumes inch up by 1.5% in the quarter, but were still down for the year so far, by 2.6%. In Brazil, volumes for the three-month period decreased by 3.9% and for the year-to-date by 3.4%.

FEMSA Cerveza's export performance, however, delivered a 12.3% quarterly rise in volumes, driven by the Dos Equis brand in the US as well as by Sol in other key markets. For the first nine months of this year, export sales volume increased by 5.8%.

"This year is providing one of the most challenging economic environments we have faced in a long time," conceded FEMSA's chairman and CEO, José Antonio Fernández. "This quarter we are again delivering double-digit growth in operating income, in-line with the first half of the year, as our international operations more than offset the prolonged weakness of the Mexican market.

"Going forward, we are faced with even more hurdles. The long-awaited recovery in the US has yet to materialise and as a result, employment in our key northern hubs remains soft."

Following on from confirmation earlier this month that the company is in discussions to "explore opportunities" involving FEMSA Cerveza, the parent company reiterated that the talks are ongoing. "However," FEMSA noted, "there can be no assurance that such discussions will lead to any definitive agreement."

As well as FEMSA Cerveza and Coca-Cola FEMSA, the parent company also owns 6,994 convenience stores in Mexico, under the umbrella of FEMSA Comercio.

To read FEMSA's full earnings statement, click here.

Sectors: Beer & cider, Soft drinks, Water

Companies: FEMSA

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