Grupo Modelo, the Mexican largest brewer, partly owned by Anheuser-Busch, has posted flat net profit in the first quarter 2003, as increased advertising costs damped the revenues from exports. The company has registered a net profit of 998 million pesos in the first quarter. Company’s exports increased 7.2% in value. “The increase though came from depreciation in the peso and export volumes fell 7.8%,” said the group. "Operating expenses were up 5.2 percent, mainly on the spending on publicity materials for sales points," Modelo said in a statement.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 6.4% percent in the first quarter from the year-ago period. “Meanwhile operating profit, or earnings before interest and taxes rose 7.9%, helped by better control of production costs, opportune purchases of commodities and general operating improvements,” Modelo said.

Sales rise of 1.9% is attributed to higher prices introduced early last year although overall volumes fell 1.5%. "The decline in the export market is because of a difficult comparative base, given that in the same period a year earlier prices were increased for the North American market, which lead to a build up of inventories in the distribution channels of Modelo's products in the United States," the company said.

24 April, 2003