Fomento Economico Mexicano, SA de CV (FEMSA) has reported its tenth consecutive year of operating income growth, despite competitive pressure and a rise in raw material costs.

The Mexian soft drink and beer producer said that a "solid performance" in all businesses drove a 17.2% increase in consolidated total revenues and an 8.7% increase in operating income.

In the fourth quarter, the company said that its soft drink subsidiary Coca-Cola FEMSA increased its soft-drink sales volume across most territories and expanded its consolidated EBITDA margin to 23.1% of revenues.

Domestic beer volumes increased 3.1% in the quarter and export beer volumes increased 7.0%.

Net profit for the October-December period was 1.410 billion pesos (US$126m), up from 1.001 billion pesos a year ago.

Jose Antonio Fernandez, chairman and CEO of FEMSA, said: "Despite significant competitive and raw material cost pressure, the FEMSA team was able to successfully navigate the challenges of 2004. I am pleased to report our 10th consecutive year of operating income growth.

"Beyond our positive results, we also made great strategic strides. At Coca-Cola FEMSA, we finalised the integration of the new soft-drink territories, which include operations in seven new countries. While there is still much work to do, we are quickly seeing the benefits of our initiatives and continuing to raise our expectations.

"At FEMSA Cerveza, 2004 was a remarkable year, as we recovered 100% ownership of our beer operations, gained profitable market share in Mexico, established an alliance with Heineken to distribute our beers in the US, and began importing Coors Light into Mexico. For the first time, our return on invested capital at FEMSA Cerveza exceeded 11%. Finally, Oxxo continued consolidating its position as the leading convenience store chain in Mexico, becoming a powerful distribution channel for many consumer products and by far the largest client of The Coca-Cola Company in Mexico and one of its top clients in Latin America.

"In 2005, we will remain focused on delivering high-quality growth and building long-term value for our shareholders," he added.