Company News

UPDATE 1-Grupo Mexico's 1st-qtr profit jumps over 20 pct

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MEXICO CITY, April 27 (Reuters) - Mexican mining, rail and infrastructure company Grupo Mexico said on Wednesday its first-quarter net profit rose 20.9 percent compared to the same period a year ago due to higher metals production and a big jump in investment gains.

Grupo Mexico posted a profit of $406.90 million for the three-month period, up from $336.52 million in the same quarter of 2015, the company said in a statement.

Revenue for the quarter at $1.9 billion was down 7.8 percent as the company grappled with lower prices for some of its key commodities, including copper and silver.

But Grupo Mexico increased copper production by 20 percent, to what it said was a record 1 million tons after starting new projects, which helped boost profits.

A $288.6-million gain in investments, compared to just $35.8 million in the first three months of last year, also helped boost its net profit.

The tailing off of the China-led commodity boom has driven metals prices downward in recent years and the company has come to rely more on its rail division. Grupo Mexico last year elected to postpone an initial public offering of its rail unit ITM, and it is unclear when, or if, it will now take place.

Sales in the transportation division dropped 3 percent in the first quarter when measured in dollars, due to the sharp depreciation of Mexico’s peso. The company said sales grew 17 percent in that division when negating the impact of foreign exchange fluctuations. (Reporting by Anna Yukhananov and Gabriel Stargardter, editing by G Crosse)