News

MEXICO: Coca-Cola FEMSA Q1 profits hit by higher costs

Most popular

Should Campari Group be renamed Aperol Group?

Why water has become more important than wine

just-drinks speaks to A-B InBev CEO Carlos Brito

just-drinks' M&A database - Oct 18

MORE
  • Q1 net profits falls by 7.7% to MXN2.4bn (US$195.6m)
  • Net sales flat at MXN33.3bn
  • Operating profits drop by 5.6% to MXN4.07bn  
  • CEO says group on-course for FY targets 

Coca-Cola FEMSA has reported a drop in Q1 profits and flat sales as higher costs dampened its performance. 

//i2.aroq.com/1/coca-cola-femsa.jpg

The Mexico-based Coca-Cola bottler said earlier this week that net profits in the three months to the end of March were down by 7.7% to MXN2.4bn (US$195.6m), as sales held steady year-on-year, totalling MXN33.3bn. Operating profits also stumbled, dropping by 5.6% year-on-year to MXN4.07bn.

The firm highlighted rising labour costs in Venezuela and increased freight costs in Argentina as hitting the bottom line. Both higher labour and freight costs affected the company's performance in Brazil.

Coca-Cola FEMSA also suffered from a "negative translation effect" as a result of the devaluation of the Venezuelan bolivar, the Argentine peso and the Brazilian peso. Stripping out the currency challenge as well as the "non-comparable effect" of last year's purchase of Grupo Fomento Queretano, total sales in the quarter rose by 10.8%.

Volumes in the three-month period were up by 3.9%, driven by the still beverages operations and by the Jugos del Valle brand in Venezuela, Colombia and Mexico, in particular.

CEO Carlos Salazar Lomelin highlighted "tough weather conditions and a volatile currency environment" as influencing performance in the quarter. "Our operators delivered solid, profitable results thanks to local revenue management initiatives, solid market execution and the geographic diversification of our franchise territories," Lomelin added.

The firm also said that it paid $688.5m in the quarter to the Coca-Cola Co, to buy 51% of Coca-Cola Bottlers Philippines, a move that was confirmed in January.

To read the company's statement, click here.


Related Content

Sugar shortage hits Coca-Cola Femsa in Venezuela as H1 profits fall - results

Sugar shortage hits Coca-Cola Femsa in Venezuela as H1 profits fall - results...

Coca-Cola Co Q1 2017 by region - results data

Coca-Cola Co Q1 2017 by region - results data...

Strong Q1 despite

Strong Q1 despite "murkiness" puts Coca-Cola in driving seat against peers - Analysis...

Coca-Cola Co optimistic for 2017 despite Q1 stagnation - results

Coca-Cola Co optimistic for 2017 despite Q1 stagnation - results...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?