PREVIEW-Walmex quarter seen strong despite recession

Tue Jul 7, 2009 1:50pm BST



 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'
 "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)