Mexico: Femsa is expected to report 3Q 2006 net profit growth of 28%
Mexico's Femsa, the largest soft drink and beer company in Latin America, is expected to post a 28 percent rise in third-quarter net profit as revenues jump on the back of higher beer sales at home and abroad, Reuters communicated October 25.
A Reuters survey of five analysts forecast, on average, that Femsa would report a net profit of 2.193 billion pesos ($199 million), up from 1.708 billion pesos a year before.
"We expect Femsa to report consolidated real revenue growth of 14.7 percent, including beer domestic volume growth of 3.5 percent and export volume growth of 9 percent," Deutsche Bank said in a note.
Femsa brews Tecate, Sol and Dos Equis brands and its soft drinks affiliate, Coca-Cola Femsa, is the second-largest Coke bottler in the world.
Femsa is also expected to report a sterling performance in its retail unit, a chain of convenience stores known as Oxxo, which has been its star performer for several quarters.
BBVA-Bancomer said in a note it expects sales at Oxxo, which sells Femsa's beers and Coke products alongside snacks, to rise 21 percent from a year before. The brokerage expects Femsa to announce it opened around 150 locations in the quarter.
But margins are seen being hit by the inclusion of struggling Brazilian brewer Kaiser in its third-quarter results. Femsa bought Kaiser in January from Molson Coors Brewing Co. for $68 million.
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