By Natalia Siniawski
MEXICO CITY (Reuters) -Mexican bottler Arca Continental reported a rise in first-quarter earnings on Thursday, as price hikes helped to offset a drop in beverage volumes across its markets.
The company, which sells Coca-Cola products and snacks throughout the Americas, posted a 10% increase in core earnings, slightly below analysts’ expectations.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to 10.65 billion pesos ($520.6 million), up from 9.66 billion pesos a year earlier and less than the 10.89 billion pesos forecast by analysts polled by LSEG.
Total beverage volumes fell by 3.1%, with revenue growth driven by higher prices rather than increased demand. Volumes of water jugs and sports drinks showed resilience, while carbonated drinks saw steeper declines.
In the United States, sales volumes also slipped driven by lower consumer traffic, economic uncertainty and Easter holiday timing. But higher prices and a focus on premium, high-margin products helped to lift profits, the company said.
Revenues climbed 12.4% at 57.04 billion pesos, while net profit grew around 10% to 4.14 billion pesos.
Arca also cited a recovery in Argentina as helping to offset currency pressures and rising costs in the region.
Volume recovery in Argentina is expected to continue, supported by lower inflation and rising consumer demand, executives from the company said in a conference call.
The company reported an EBITDA margin of 15.4% for the country in the first quarter and said it sees further improvement for the full year.
“While challenges persist, we remain cautiously optimistic about South America’s outlook in 2025,” CEO Arturo Gutierrez Hernandez said in a call with analysts, pointing to signs of macroeconomic stabilization.
In Ecuador and Peru, volumes dropped due to economic weakness and security concerns. Ecuador saw a 7.4% decline, while Peru’s fell 4.4. However, both countries are expected to see volume growth in the year, driven by a moderate economic recovery.
($1 = 20.4604 pesos at end-March)
(Reporting by Natalia Siniawski; Editing by Kylie Madry, Barbara Lewis and Alistair Bell)
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