Tequila giant Becle's profit jumps despite slowing demand (updated)

Becle SAB de CV

23/02/2024 24:22

(Adds context on slowing demand, company statement from filing)
       MEXICO CITY, Feb 22 (Reuters) - Mexican distiller Becle
 CUERVO.MX , the world's largest tequila producer, on Thursday
posted a 41% rise in its net profit for the last three months of
2023 compared to a year earlier, even as sales slipped in key
markets.
    The Mexico City-based firm, which sells Jose Cuervo family
tequilas as well as mezcal, whiskey and other liquors, posted a
net profit of 1.96 billion pesos ($115 million) for the fourth
quarter, even as revenues fell 5% to 13.16 billion pesos.
    This landed above estimates from analysts polled by LSEG,
who had forecast a quarterly profit of 1.28 billion pesos from
revenues of 13.05 billion.
    Earnings before interest, tax, depreciation and amortization
(EBITDA) edged down 2% to 2.44 billion pesos, just above a
forecast of 2.22 billion pesos.        
    "Slowing consumer demand for spirits in several markets
indicates trends are normalizing after two years of exponential
growth," Becle's management said in a filing to Mexico's main
stock exchange.
    "We anticipate cost benefits for this year," it added,
"stemming from reduced supply chain pressures and lower input
costs, resulting in an opportunity for margins expansion."   
    Becle's stock is down nearly a quarter compared to this time
last year, largely due to a 19% nosedive after its third-quarter
earnings, when it suffered from a stronger Mexican peso
battering foreign earnings as well as slower U.S. volumes. 
    Earlier this month spirits giant Diageo  DGE.L , which sells
Don Julio brand tequila, replaced its Mexico chief after a
buildup of unsold inventories in Latin America's No. 2 economy
forced a profit warning that sent shares tumbling.

 (Reporting by Sarah Morland; Editing by Brendan O'Boyle)