By Valentine Hilaire and Kylie Madry
MEXICO CITY (Reuters) – Mexican bottler and retailer Femsa plans to increase the number of its Oxxo convenience stores by as much as 50% across Latin America over the next decade, executives said on Monday, with hundreds planned for Brazil, Chile and Colombia in 2022 alone.
Femsa already operates 20,431 Oxxo stores in Latin America, generating some 35% of the parent’s revenue, its fourth-quarter results showed.
In addition to adding some 800 new Oxxo stores in its home country in 2022, executives told investors on a call the company hoped to open another 200 Oxxo stores in Brazil as well as 150 between Chile and Colombia.
“As we’re getting bigger in these other countries, obviously, the profitability there begins to kind of supercharge,” said Juan Fonseca, investor relations director, of the company’s ambitious expansion plans.
Femsa also said it had completed the purchase of OK Market, which operates 134 convenience stores in Chile.
Earlier on Monday, Femsa posted a fourth-quarter net profit of 6.7 billion pesos ($328 million), up from a net loss of 1.2 billion pesos in the year-earlier period, boosted by a higher operating profit and a decrease in net interest expenses.
The conglomerate, which manages one of the largest Coca-Cola producers in the world, also reported a 16.3% increase in quarterly revenue, helped by growth in all its business units.
Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter rose to 23.4 billion pesos, in line with a Refinitiv estimate of 23.07 billion pesos.
The company’s subsidiary, Coca-Cola Femsa, reported an 82.8% increase in quarterly net profit last week. Chief Executive John Santa Maria attributed the rise to increased sales across Latin America in the quarterly earnings report.
Barclays said in a mid-January analysis that Femsa was positioned well in 2022.
Shares in Femsa inched up 0.86% by market close Monday afternoon.
($1 = 20.5075 pesos at end-December)
(Reporting by Valentine Hilaire, Kylie Madry and Noe Torres; Writing by Stefanie Eschenbacher; Editing by Drazen Jorgic, Mark Porter and Karishma Singh)
