Soft drink results help Mexican brewer

Solid results in its soft-drinks bottling business were expected to offset weakness in packaging and retail units to give Mexican brewer and bottler Femsa moderate second-quarter growth, analysts said. Femsa was seen posting a 1.3 per cent increase in operating profit and a 4.5 per cent increase in revenues for the second quarter, compared with the same period last year, according to the average forecasts in a Reuters poll of four sector analysts. Coca Cola Femsa, the bottling firm in which Femsa holds a 51-percent stake, was again seen boosting profits, as in the first quarter. "The outstanding performer this quarter will again be KOF, which continues to gain market share against Pepsi,"​ said analyst Adriana Neriga of Banamex-Accival. Warmer June weather, amid a cool and rainy summer, helped increase soft drink sales volumes for the quarter, UBS Warburg said in a report. Mexico sales were expected to offset ongoing pricing problems in KOF's Argentina operation, now further pressured by that country's economic crisis. Femsa was expected to report slower beer sales in Mexico than for the same period a year ago, hurt by the economic slowdown.But like chief rival Grupo Modelo, Femsa compensated for the flat domestic market with growth in exports, mainly to the United States, analysts said.