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UPDATE 2-Mexico's Coke Femsa profit slips despite surging sales
July 24, 2012 / 8:28 PM / in 5 years

UPDATE 2-Mexico's Coke Femsa profit slips despite surging sales

* Q2 profit 2.713 bln pesos vs 2.749 bln pesos

* Revenue up 28 pct, helped by acquisitions

MEXICO CITY, July 24 (Reuters) - Mexico’s Coca-Cola Femsa on Tuesday said second-quarter profit fell 1.3 percent from a year ago, hurt by higher debt costs and a one-time charge, even as revenue soared.

Coke-Femsa, a joint venture of The Coca-Cola Co and Mexican retailer Femsa, said second-quarter profit slipped to 2.713 billion pesos ($203 million) from 2.749 billion pesos in the year-earlier period.

The company went on a buying spree last year and its purchase of smaller bottlers Grupo Tampico and Grupo Cimsa helped boost sales.

Revenue rose 28 percent to 36.3 billion pesos.

Offsetting the higher sales, Coke Femsa said, was a one-time charge of 469 million pesos in the quarter related to labor law changes in Venezuela.

The company also spent more in the quarter servicing its debt.

Coke Femsa shares closed down 0.47 percent at 164.76 pesos in local market trading.

The company has continued looking for acquisitions this year. Earlier this month it announced Jugos del Valle, its juice company with Coca-Cola, bought Mexican dairy company Santa Clara.

Coke Femsa is also considering buying a controlling stake in Coke’s Philippine bottling operations. The company began what it calls an “a n- the-ground evaluation process” o f this operation in the second quarter, according to its results statement.

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