UPDATE 2-Mexico's Femsa posts higher operating profit, but net income sags

Fri Jul 25, 2014 9:51am EDT

Related Topics

(Adds details on bottling business, share movement)

MEXICO CITY, July 25 (Reuters) - Mexico's Femsa reported on Friday a jump in operating profit in the second quarter, boosted by double-digit sales increases at its convenience-store chain Oxxo and Coke bottling business, but its net profit fell on higher debt costs.

Femsa reported an operating profit of 7.953 billion pesos in the period, up 9 percent from 7.294 billion pesos in the year-earlier period.

The beverage company's Oxxo stores reported revenue jumped 12.4 percent, while bottler Coca-Cola Femsa saw a 14.3 percent increase in quarterly revenue.

Femsa's net profit, however, fell 15 percent to 3.018 billion pesos ($232 million), from 3.565 billion pesos in the second quarter of 2013.

Shares in the company were down 0.11 percent at 129.51 in morning trading.

Femsa's bottling business Coke Femsa on Wednesday reported a lower second-quarter profit and said a new sales tax on sugary beverages in Mexico is causing sales to slow.

Coke Femsa makes around half its revenue in Mexico, Latin America's No.2 economy, even after a string of acquisitions abroad in recent years.

Mexican consumer spending has been weak this year, adding to difficulties for retailers.

Mexico's central bank has cut interest rates to a record low of 3 percent, but its board members have warned that domestic spending "still hasn't shown clear signals of recovery."

($1 = 12.9865 pesos at end June) (Reporting by Elinor Comlay; Editing by Paul Simao and Nick Zieminski)

FILED UNDER: