E-Malt.com News article: 2138

MEXICO: Grupo Modelo, Mexico's top brewer and maker of the popular Corona beer, is expected to report a 20 % leap in fourth-quarter net profit, driven by strong U.S. sales, analysts said on February 3. Five analysts surveyed by Reuters forecast, on average, sales for the October-December period would rise 6 percent from a year earlier because beer distributors of Modelo brands in the United States bought heavily ahead of a price hike.

Modelo, half owned by Anheuser Busch, the world's No. 1 brewer, said in November it planned to increase prices for brands such as Corona and Corona Light in the United States from the start of 2004. "Volumes (of exports) should be very good, up 16 percent year on year, supported by an inventory build-up" ahead of the
January price rise, Credit Suisse First Boston said in a recent research report.

About 90 percent of Modelo's exports go to the United States. Sales abroad represent about 30 percent of company revenue.

Domestic sales in the fourth quarter are expected to be up 2 percent to 3 percent. A local price freeze helped support volume sales as Mexico's economy remained sluggish and Mexicans were careful about their spending.

Earnings before interest, taxes, depreciation and amortization (EBITDA) -- a key indicator of profitability for Mexican companies -- are seen growing 8.4 percent in the quarter, according to the Reuters survey of analysts.


04 February, 2004