Beverage and retail company Fomento Economico Mexicano SAB de CV, or FEMSA, said its net consolidated income grew 67.9% year over year in the second quarter, benefiting from favorable foreign currency effects and a stable domestic consumer market.
Net consolidated income jumped to 10.78 billion Mexican pesos in the second quarter from 6.42 billion pesos in the prior-year period.
FEMSA attributed the income growth mainly to a noncash foreign exchange gain related to its U.S. dollar-denominated cash position as impacted by the depreciation of the Mexican peso. The company also cited lower interest expense and higher income from operations.
Net majority income for the quarter was 2.46 pesos per FEMSA unit, the company said.
Total second-quarter revenues increased year over year to 124.71 billion pesos from 114.80 billion pesos, with the retail, health and fuel divisions of the FEMSA Comercio business unit all posting solid growth.
Gross profit improved to 45.72 billion pesos from 42.20 billion pesos in the year-ago quarter, and income from operations rose to 10.73 billion pesos from 10.43 billion pesos.
"In terms of macroeconomic trends, the consumer environment in our key Mexico market has been stable ... Other variables, such as the peso-dollar exchange rate, have improved slightly in recent weeks, which is encouraging," said FEMSA CEO Eduardo Padilla.
Padilla, however, warned about the impact of global trade tensions, as well as uncertainties in several markets outside Mexico.
"Mexico is not immune to global concerns on international trade, and there are other macro questions to be answered in the near future," he said.
Franchise bottler Coca-Cola FEMSA SAB de CV, which is controlled by FEMSA, also reported year-over-year growth in second-quarter net income.
Coca-Cola FEMSA earned 1.32 pesos per share during the quarter. Net income attributable to equity holders of the company climbed to 2.78 billion pesos from 2.23 billion pesos in the year-ago period.
Total revenues grew to 52.09 billion pesos in the quarter from 50.11 billion pesos a year earlier. The company said the increase was driven by the consolidation of recently acquired territories in Guatemala, volume growth in Brazil and Central America, and price hikes above inflation in Argentina and Mexico.
Coca-Cola FEMSA's second-quarter gross profit increased year over year to 22.95 billion pesos from 22.83 billion pesos, while operating income fell to 6.28 billion pesos from 6.49 billion pesos.
Total sales volume slipped to 977.1 million unit cases in the quarter from 995.0 million unit cases a year earlier.
As of July 26, US$1 was equivalent to 18.62 Mexican pesos.