MEXICO: Coca-Cola FEMSA YTD profits fall as costs hit Q3
- YTD net profits down 7% to MXN8.29bn (US$628.4m)
- Net sales up 3% to MXN109.7bn
- Operating profits flat at MXN14.5bn
- Q3 profits down 17% to MXN3bn
Coca-Cola FEMSA is switching CEOs
Coca-Cola FEMSA has blamed higher marketing and staff costs for a weak Q3 that saw year-to-date profits fall.
Net profits were down 7% to MXN8.29bn (US$628.4m) in the nine months to the end of September, the Mexico-based Coca-Cola bottler said yesterday (24 October). Net sales were up by 3% to MXN109.7bn in the same period, while operating profits stayed flat at MXN14.5bn.
Q3 profits were down by 17% to MXN3bn as operating expenses jumped by MXN1bn on a higher marketing spend as well as increased labour and freight costs.
The company, which yesterday said it is to replace CEO Carlos Salazar Lomelin with current COO John Santa María Otazua next year, pointed to recent acquisitions Grupo Yoli and Companhia Fluminense de Refrigerantes for increasing Q3 revenues and volumes, up 4% and 5% respectively. YTD volumes grew by 4%.
“In the face of a continued tough consumer environment mainly in Mexico and Brazil, our geographically balanced portfolio of franchises delivered mid-single digit volume growth, including the integration of Grupo Yoli in Mexico and Fluminense in Brazil,” Lomelin said.
“Our company continues to diversify and strengthen our competitive position with the acquisition of Spaipa in Brazil, while reinforcing our positive long-term view of the country.”
Coca-Cola FEMSA announced its acquisition of Spaipa Industria Brasileira de Bebidas last month.
Coca-Cola FEMSA's share price ended yesterday's trading down about 1%.
The weak Q3 exacerbated H1 struggles, when half-year net profits slipped by 2.1% to MXN5.28bn.
Coca-Cola FEMSA is a subsidiary of Mexico-based retailer FEMSA, which owns a 20% share in Heineken.
To view Coca-Cola FEMSA's official results, click here.
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