FEMSA profits jump on Heineken gain

FEMSA profits jump on Heineken gain

Mexico's Fomento Economico Mexicano (FEMSA) has reported a leap in half-year profits thanks to a one-off gain from the sale of its beer business to Heineken.

FEMSA's net profits soared to MXN31.2bn (US$2.4bn) for the six months to the end of June, compared to MXN3.2bn in the same period of 2009, the Mexican firm said yesterday (26 July).

An MXN26.5bn one-off gain from the completion of the firm's deal with Heineken boosted results.

FEMSA agreed earlier this year to hand its FEMSA Cerveza beer arm to Heineken in exchange for a 20% stake in the multinational brewer.

The group said that its one-off gain from the deal "reflects the difference between the market value of Heineken shares (20% equity interest) at the closing of the transaction and the book value of FEMSA’s beer operations as of the same date, net of transaction tax".

Net profits from beer totalled MXN706m for the first four months of 2010, prior to completion of the Heineken deal, said FEMSA, which brews Sol beer. FEMSA Cerveza is Mexico's second largest brewer behind Grupo Modelo.

Strong performances from FEMSA's remaining soft drinks and retail businesses ensured that the firm increased like-for-like net sales by 9% to MXN80.6bn for the first half of 2010.

Comparable net profits, including an estimated two-month contribution from FEMSA's 20% stake in Heineken, rose by 43% to MXN6.4bn for the half-year.

For Coca-Cola FEMSA's results, click here.