Beverage company Fomento Economico Mexicano, S.A.B. de C.V. or FEMSA (FMX), Tuesday said its second-quarter profit increased from the same quarter a year ago, boosted by an increase in revenues.
Monterrey, Mexico-based FEMSA's second quarter net income rose 6.7% to Ps.3.73 billion from Ps.3.49 billion in the same quarter a year ago, helped by an increase in operating income that more than offset an increase in the integral result of financing during the quarter.
The increase in financing was due to the appreciation of the US dollar against local currencies as applied to the company's liability position, and an increase in interest expenses.
Net majority income for the second quarter increased 0.3% to Ps. 0.70 per FEMSA Unit1 from the same quarter a year ago., while net majority income per FEMSA ADS came in at US$0.53 for the quarter.
Gross margin for the quarter, however, dropped 30 basis points from 46.7% in the same quarter a year ago.
Total revenues for the second quarter increased 19% to Ps.48.18 billion from Ps.40.56 billion in the same quarter last year. Coca-Cola FEMSA contributed nearly 74% of the incremental consolidated revenues, while FEMSA Comercio and FEMSA Cerveza contributed the rest.
During the quarter, FEMSA Cervaza's beer units, however, recorded decline in sales volume from Brazil and Mexico, negatively impacted by the H1N1 flu outbreak. Sales volume from Mexico declined 5.9% from the same quarter last year, while sales volume from Brazil decreased 8.4% from the second quarter of last year.
Commenting on the results, José Antonio Fernández, Chairman and Chief Executive Officer, FEMSA said, "During the second quarter we were able to extend the performance trends set during the first quarter, as some of our international results managed to offset the more complex environment experienced in our Mexico beverage operations, and FEMSA Comercio had another strong quarter."
Income from operations for the second quarter improved 16.1% to Ps.6.79 billion from Ps.5.85 billion in the comparable period a a year ago.
Net income for the six-month period declined 6.7% to Ps.5.167 billion from the same quarter a year ago, due to an increase in integral results of financing. Operating earnings for the period, however, was up 17.2% from the same period a year ago.
For the six-month period, revenues were Ps. 91.251 billion, up 18.7% from the same quarter a year ago.
FMX is currently trading at $35.93 million, up $0.48 or 1.35%, on a volume of 0.749 million shares on the NYSE.
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