Latin America's largest bottler and brewer, Mexico's Femsa, said on July 28 its second quarter net profit fell 14.5 %, dragged lower by financing costs from a major acquisition, Reuters reported. Monterrey-based Femsa said second quarter net was 721 million pesos ($69 million), lower than the average forecast of a Reuters analysts' survey which had predicted 1.079 billion pesos. Sales rose 36 % to 19.1 billion pesos, boosted by the inclusion of two months' numbers of Panamerican Beverages (Panamco), which Femsa's Coke unit Coca-Cola Femsa bought in May for $2.7 billion plus $880 million in debt.

Femsa's beer unit, in recent quarters the ugly duckling division, posted a 6.2 % increase in national sales volumes, boosted by a bout of hot weather and matching the increase of sales of local rival Grupo Modelo. April and May were unusually hot in Mexico. Easter, a traditional holiday period, also fell in the second quarter, and Femsa said those two factors led to the increase in domestic beer sales volumes. Modelo, which reported its earnings on July 18, said shipments in Mexico rose 6.3 % in the second quarter. Femsa said its beer export volumes fell 4.5 % in the quarter on lower demand for imported beers in the United States, although export revenues were helped by the 3 % appreciation of the peso against the dollar.

Femsa, which brews Tecate, Dos Equis and Sol beers, said it consolidated Panamco's results into its balance sheet from May although did not give proforma figures for the second quarter of 2002. It said its quarterly results will not be comparable to previous quarters until the third quarter of 2004. Femsa said net financial costs the quarter were 446 million pesos.

Femsa's shares fell 1.72 % to 40.65 pesos in early afternoon trade on Monday in Mexico City and its ADRs in New York were off 1.75 % to $38.76. Its shares are up about 7 % so far this year, lagging the main index of the Mexican bourse which has seen a 20 % advance.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .