Mexican bottler Arca reports 24% rise in Q4 net profit

Mexican bottler Arca reports 24% rise in Q4 net profit

MEXICO CITY (Reuters) – Mexican bottler Arca Continental reported a 24.2% increase in its fourth-quarter net profit year-over-year, the company said in a statement on Thursday, pointing to price increases and cost hedging that offset higher raw material costs.

Arca, which sells water and soft drinks in the United States and parts of Latin America, posted a net quarterly profit of 3.96 billion Mexican pesos ($202.78 million).

Arca meanwhile reported that its revenues rose 7.1% to total 52.64 billion pesos ($2.70 billion) due in large part to price increases, as quarterly volumes were nearly flat.

The cost of sales was up 8.1% from the year-ago quarter, Arca said, due to higher costs for raw materials such as PET plastic used in containers and aluminum.

Earnings before interest, tax, depreciation and amortization (EBITDA), or core earnings, rose 9.4% to reach 9.98 billion pesos.

Chief Executive Arturo Gutierrez said in a statement the company would seek to “take advantage of growth opportunities” from an agreement with Coca-Cola signed last year, including “expansion into new beverage categories.”

Arca, which makes about two-fifths of its sales in Mexico and the United States, also operates in Peru, Ecuador, and Argentina.

($1 = 19.5089 pesos at end-December)