MEXICO: Grupo Modelo reports nine-month profits, sales rise
- Nine-month net profits rise by 11% to MXN8.36bn (US$615m)
- Net sales increase by 6% to MXN67.9bn
- Operating profits up by 5.3% to MXN17.85bn
- Stronger beer demand in Mexico offsets export decline in Q3
Grupo Modelo sees stronger growth in Mexico in 2011
Grupo Modelo has reported a strong rise in profits for the first nine months of its fiscal year, but beer sales momentum slowed markedly in the third quarter.
A strong peso currency curtailed Modelo's returns on volume sales in key export markets and ensured that overall group volumes rose quicker than net sales for the nine months to the end of September. Volumes increased by 7% on the same period of last year, with net sales up by 6%, to MXN67.9bn (US$5bn).
In the third quarter in particular, Modelo was lifted in the period by a resurgent Mexican beer market. In Mexico, where the group is the largest brewer in a virtual duopoly with Heineken-owned FEMSA Cerveza, Modelo reported domestic volume sales up by 7.6% for the nine months.
In the third quarter, against a 4% drop in export volumes, domestic volumes rose by 3.7%. Third-quarter net sales, meanwhile, were up by 9.6% for the Mexico business and fell by 7.6% for the export business. In total, third-quarter net sales increased by 1.4% to MXN23.6bn.
While the firm said that currency impacted net sales abroad, it added that exchange rate gains related to the depreciation of the peso versus the US$ in the third quarter helped to drive up Modelo's nine-month net profits by 11%, to MXN8.36bn. Operating profits for the nine months rose by 5.3%, to MXN17.85bn.
In the third quarter, net profits rose by 32.6% to MXN3.3bn. However, third-quarter operating profits fell by 1.5% to MXN6.14bn.
Anheuser-Busch InBev has a 50% non-controlling stake in Modelo.
For the company's announcement, click here.
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