Brewing and soft drinks group Fomento Economico Mexicano (FEMSA) has posted a 7.2% rise in consolidated total revenues for the third quarter to MXN36.73bn (US$3.4bn), but revenue growth at its brewing arm lagged behind growth in soft drinks and retailing.

While sales at its Oxxo retail arm rose by 15.2% and Coca-Cola FEMSA saw a 6.0% rise in revenues, FEMSA Cerveza registered only 3.3% revenue growth.

For the first nine months of 2007, FEMSA's consolidated total group revenues increased by 7.8% to MXN106.08bn.

Net income increased by 8.6% to MXN3.3bn in the third quarter, on the back of operating income growth which FEMSA said more than offset an increase in the integral cost of financing. For the first nine months, net income rose by 13.1% to MXN8.15bn, driven largely by a shift from a loss in foreign exchange in 2006 to a gain in 2007. 

At FEMSA Cerveza, sales in Mexico increased by 3.5% to 6.89m hectoliters, despite tough comparable growth figures from the third quarter of 2006. FEMSA said the increase reflected strong consumer demand during the first two months of the quarter that was partially offset by negative weather conditions mainly in southeast Mexico during September. Growth was driven by its Tecate, Sol and Indio brand families, the company said. For the first nine months of 2007, Mexican sales volumes increased 3.2% to 19.79m hls.

Brazil sales volumes increased by 6.7% to 2.20m hls in the third quarter, spearheaded by the Sol brand. For the first nine months of 2007, sales volumes in Brazil increased by 9.8% to 6.54m hls.

Export sales volumes rose by 2.3% to 863,000 hls for the quarter, and by 11.7% to 2.51m hls for the nine-month period.

Last week, Coca-Cola FEMSA posted operating profit for the three months to the end of September of MXN2.82bn (US$261.3m), up 11.5% year-on-year. Sales rose by 6% to MXN16.70bn, while net profit was also up, by 4.8% at MXN1.89bn.

For the nine months of the year, operating profit rose by 11.1% to MXN8.02bn, while sales were up by 7.8% at MXN49.24bn. Net profit leapt by 34.7% in the first three quarters to MXN4.86bn.

"As the months have gone by, the trends that were established in our businesses during the first half of the year have continued to develop, and generally conditions today have improved relative to the earlier periods," said FEMSA chairman and CEO Jose Antonio Fernandez. "During the third quarter, Coca-Cola FEMSA continued to build on the profitability of its all-important Mexico operation, achieving real growth in operating income for the first time in four quarters, while the rest of the territories continued their strong pace of earnings growth. Oxxo once again delivered a stellar quarter with solid revenue growth and remarkable margin expansion."

Regarding the slower progress of the company's beer operations, Fernandez added: "At FEMSA Cerveza, we continued to experience a tough raw materials environment that, together with increased promotional activity in Mexico, put pressure on our profits in the short term even as we continued to make significant progress in the United States and Brazil."