By Christine Murray
MEXICO CITY Feb 27 Mexico's Femsa said on Thursday fourth-quarter profit halved from strong year-ago levels due to higher financial costs at its bottling joint venture co-owned by Coca-Cola Co.
The bottler and convenience store retailer said profit fell 48 percent to 4.99 billion pesos ($381 million) in the three months to end-December, from 9.66 billion pesos a year earlier.
This was largely due to a large one-off gain it made from its stake in Dutch brewer Heineken a year earlier, but also the cost of financing a string of acquisitions, mostly in Brazil, at its Coca-Cola Femsa joint venture.
Femsa's financial expenditures almost tripled from 853 million pesos to 2.46 billion pesos.
Shares at Coke Femsa, which is co-owned with U.S. beverage group Coca-Cola Co, are down more than 40 percent from an all-time high in April after weak consumer spending in Brazil coincided with a new sugary drinks levy in Mexico designed to curb rising obesity.
At the group level, revenue rose 11 percent to 70.5 billion pesos, driven by strong sales at convenience store division Femsa Comercio.
Despite slumping consumer confidence and retail sales in No.1 market Mexico, the division which runs convenience stores under its Oxxo brand opened 511 new stores in the quarter and total sales increased 13.5 percent from the year-earlier quarter.
Chief Financial Officer Javier Astaburuaga told analysts on a call that he expected to open more than 1000 new stores in 2014.
He added that same-store sales would trend toward the mid single-digit range so long as the economic environment improves as the year progresses.
Mexico's economy slowed sharply in the fourth quarter as industry ground to a halt and the pace of services growth dropped. Retail sales in Mexico saw their fastest drop in a year in December.
Astaburuaga said total capital expenditure at the group level could reach $1.35 billion this year, with $850 million going to Coca-Cola Femsa.
Shares in Monterrey-based Femsa rose 2.07 percent by 1215 EST to 115.22 pesos per share.