PREVIEW-Walmex quarter seen strong despite recession
By Gabriela Lopez
MONTERREY, Mexico, July 7 (Reuters) - Leading Mexican retailer Wal-Mart de Mexico is expected to post a 12.8 percent rise in net profit for the second quarter as aggressive promotions and a helpful calendar offset a deep recession.
The retailer, known as Walmex and controlled by Wal-Mart Stores Inc (WMT.N), is likely to post quarterly net profit of 3.641 billion pesos ($276 million), compared to 3.229 billion pesos in the year-ago period, according to the average estimate of five analysts surveyed by Reuters.
Last year, the busy Holy Week vacation week fell in March, the end of the first quarter, while this year it was in April, the beginning of the second quarter.
"The second-quarter results may be helped by the calendar. Still, we expect weaker rates of profit growth in the second half of 2009 because of higher unemployment," Santander said in a report.
Mexico's economy has been slammed into recession by slumping U.S. demand for its manufactured exports.
Consumer confidence sank to a record low in May before improving slightly in June.
Still, strong store expansion and promotions probably helped Walmex's revenues for the quarter rise almost 12 percent year over year, according to the average of the analysts' estimates.
"We expect Walmex to post among the best results of Mexico's corporations," Credit Suisse said in a report. "During the quarter we continued to see bad news in the macroeconomy."
A few days of panic shopping -- triggered by the H1N1 flu epidemic which forced Mexico to shut down part of its economy in May -- also might have given Walmex's sales a minor boost, the analysts said.
Walmex, which competes against Soriana (SORIANAB.MX) and Comercial Mexicana (COMEUBC.MX), is expected to report its quarterly results on Wednesday.
The following table shows the average of the analysts' estimates in non-inflation-adjusted pesos. ==============================================================
2009 2008 PERCENT
Apr-Jun Apr-Jun CHANGE -------------------------------------------------------------- Revenue 64.206 bln 57.381 bln +11.9 pct EBITDA 6.051 bln 5.284 bln +14.5 pct EBITDA margin 9.42 pct 9.21 pct +21 bps Operating profit 4.891 bln 4.248 bln +15.1 pct Operating margin 7.62 pct 7.40 pct +22 bps Net profit 3.641 bln 3.229 bln +12.8 pct =============================================================== ($1 = 13.1695 pesos at end of June)
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