27 de julio de 2016 / 18:37 / en un año

UPDATE 3-Femsa's profit jumps on Mexico retail strength

(Adds Heineken question from call)

MEXICO CITY, July 27 (Reuters) - Mexican bottler and retailer Fomento Economico Mexicano (Femsa) said on Wednesday that second-quarter net profit rose more than a quarter compared with the year-earlier period, helped by its fast-growing retail division.

Femsa said net majority income was up 25.9 percent to 4.873 billion pesos ($267 million) in the April to June period.

In its retail division revenue rose 12.6 percent, while Oxxo same-store sales grew more than 5 percent. The company opened 263 net new Oxxo convenience stores in the quarter.

Retail sales in Mexico rose for the fourth time in five months in May, as consumer spending continued to support growth in the economy.

Revenue also jumped 25.9 percent to 94.543 billion pesos, driven by the integration of Chilean pharmacy operator Socofar, in which it acquired a majority stake last year.

Femsa subsidiary Coca-Cola Femsa, Latin America’s largest Coke bottler, reported a 25 percent fall in second-quarter profit on Wednesday, hurt by lower margins and higher raw material costs.

Shares in Femsa were down 0.84 percent at 174.13 pesos at about 1:15 p.m. local time, while Coke Femsa shares were down 2.85 percent at 143.39 pesos.

Coke Femsa said it had reached a new cooperation framework with Coca-Cola Co. Under the deal, concentrate prices for sparkling beverages in Mexico will gradually rise over three years beginning in July 2017, it said.

That will cost Coke Femsa around $35 million more a year in 2017, 2018 and 2019, it estimated.

On an analyst conference call, the company was asked about its exclusivity contract with brewer Heineken in its Oxxo stores, valid until 2020, after a local journalist suggested it might not make sense to renew it.

Company executives said that it was not an urgent matter right now.

Coke Femsa, which operates across Latin America and also in the Philippines, said that second-quarter profit was hurt by higher sugar prices.

It added that the depreciation of the average exchange rate of the Argentine peso, the Brazilian real, the Colombian peso and the Mexican peso also increased its raw material costs, which are denominated in U.S. dollars.

Coke Femsa said sales rose 9.3 percent to 39.93 billion pesos. ($1 = 18.2575 pesos at the end of June) (Reporting by Christine Murray, Gayathree Ganesan, Gabriela Lopez and Noe Torres; Editing by Jonathan Oatis and Matthew Lewis)

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