Mexico: Modelo, Mexico's largest brewer, is seen posting a 17 % leap in second-quarter net profits, thanks largely to solid sales of its popular Corona beer in the United States, its main export market. Five analysts surveyed by Reuters this week forecast, on average, that Modelo will report a net profit of 1.814 billion pesos ($158 million). Analysts predicted the weak spot in the results would be an expected 1 percent increase in domestic sales volumes. They said unusually wet weather and a weak job picture limited beer drinking in Mexico during the quarter.

The low domestic volume growth will, however, be compensated by an expansion of between 8-10 % in export volumes, mainly to the United States, the destination of 90 percent of Modelo's shipments abroad. Growing exports and an average price increase of 6 percent implemented in January, will improve profits, analysts predicted. "The climate was not favorable for Modelo's sales in Mexico but the decision to raise prices and the export volume to the United States will allow the company to deliver a decent set of results," said one analyst.

Modelo, half owned by U.S.-based Anheuser Busch Co. Inc., the world's largest brewer, will see revenues rise nearly 8 percent, also boosted by an average 5 percent increase in prices in the domestic market, analysts said. Modelo is scheduled to post its second quarter earnings next week, but has not yet set a specific date.

16 July, 2004