July 24, 2020 / 12:48 PM / 21 days ago

Mexico's Femsa posts $509 million loss amid coronavirus toll on Oxxo stores, gas stations

MONTERREY (Reuters) - Mexican conglomerate Femsa on Friday reported a net loss of 11.7 billion pesos ($509.3 million) in the second quarter, after steep drops in sales at its gas stations and vast chain of Oxxo convenience stores due to the coronavirus crisis.

The Monterrey-based bottler and retailer (FEMSAUBD.MX) posted revenue in the April to June period of 114.5 billion pesos, down 11% from the second quarter last year.

The company also registered a tax payment of 8.8 billion pesos it had announced in May, cutting into quarterly profits. A year earlier, Femsa logged net profit of 5.64 billion pesos.

Revenues for Femsa’s gas stations fell 49%, as stay-at-home measures reduced mobility. Oxxo sales declined 8%, hit by a nearly 25% drop in store traffic driven by lockdown measures as well as “significant” beer shortages, the company said.

In a call with analysts, investor relations director Juan Fonseca said Femsa was evaluating which low-traffic Oxxo stores to close. The company in the second quarter shuttered 24 locations permanently and another 260 temporarily, leaving it with 19,558 operating stores.

Even so, Fonseca said plans were underway to open Oxxo stores in Brazil at the end of the year, without specifying how many.

The only Femsa business that grew was its pharmacy unit, with a 2.5% revenue increase, due to sustained demand.

Chief Executive Eduardo Padilla described the quarter as “challenging” and said the outlook was still uncertain.

“We are seeing a very tentative recovery that will probably take a long time,” he said in a statement accompanying results.

Reporting by Laura Gottesdiener and Daina Beth Solomon; editing by Jonathan Oatis

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