Bottler Arca Continental's first-quarter profit ticks up, dragged down by peso

MEXICO CITY, April 25 (Reuters) - Mexican bottler Arca Continental (AC.MX), opens new tab on Thursday posted a first-quarter core profit that ticked up 1.2%, above forecasts but dragged down by the appreciation of the Mexican peso.

Arca, which sells bottled water, soft drinks and snacks across the Americas, reported earnings before interest, taxes, depreciation and amortization (EBITDA) of 9.66 billion pesos ($584.54 million), compared with 9.06 billion pesos forecast by analysts polled by LSEG.

This brought its net profit up just 0.8% to 3.76 billion pesos from revenues that inched up 0.1% to 50.74 billion pesos compared with the year-ago period. Analysts had forecast 3.75 billion pesos and 50.08 billion pesos, respectively.

Arca, Latin America's No. 2 Coca-Cola (KO.N), opens new tab bottler after Coca-Cola FEMSA (KOFUBL.MX), opens new tab, said revenues were steady as volumes largely remained unchanged from the year-ago quarter and the Mexican peso gained on the greenback.

The peso appreciated around 8% against the U.S. dollar year-on-year in the first quarter, after sweeping gains last year diluted the earnings of companies earning income abroad.

On a currency-neutral basis, sales increased 8.5%.

Arca added that the cost of sales inched down 1.8% compared with the first quarter of 2023 on lower raw materials prices and favorable foreign-exchange hedging.

The company, which sells packaged snacks such as nuts and popcorn as well as bottled drinks from brands such as Fanta, said last month it would invest just over $1 billion this year, largely in Mexico and the rest split between the United States and South America.

On Thursday, Arca said it would carry out an expansion of its Texas plant for $168 million, adding two production lines and doubling its warehouse space.

($1 = 16.5310 Mexican pesos at end-March)