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PEPSI GEMEX S A DE CV$33.37$.26.79%

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 Pepsi-Gemex Announces a 6.6% Increase in Total Revenues, a 9.2% Increase in Gross Profit, a 14.4% Increase in Operating Income and a 13.6% Increase in EBITDAOperating Margin Reached 11.7% for the First Nine Months of 2002
   Thursday, October 24, 2002 5:58:16 PM ET

MEXICO CITY, Oct 24, 2002 (BUSINESS WIRE) --

   Announces a 7.1% Increase in Unit Case Volume and 10.0% Increase
         in Jug Water Volume for the First Nine Months of 2002 

Pepsi-Gemex, S.A. de C.V., (GEM ), the second largest Pepsi bottler outside the United States and sole anchor bottler for Pepsi-Cola in Mexico, today reported its financial results for the third quarter and first nine months of 2002.

    First Nine Months Volumes 

Soft drink and purified water (PET presentations) unit sales volume for the first nine months of 2002 increased 7.1%, reaching 298.3 million unit cases. Soft drink sales volume increased 5.5% during the first nine months of 2002 and PET presentations of purified water sales volume increased 26.4% during the same period.

The Company sold 80.8 million five-gallon jugs of Electropura purified water during the first nine months of 2002, a 10.0% increase in volume over the comparable previous year period.

    Third Quarter Volumes 

Soft drink and purified water (PET presentations) unit sales volume for the third quarter of 2002 increased 3.3%, reaching 101.1 million unit cases. Soft drink sales volume increased 2.1% during the third quarter and PET presentations of purified water sales volume increased 20.0% during the same period. The non-returnable portion of the soft drink and purified water mix represented 93.6% of total volume during the third quarter of the year.

The Company sold 27.3 million five-gallon jugs of Electropura purified water during the third quarter of 2002, an 8.7% increase in volume over the comparable previous year period.

All data in the financial statements has been restated in constant Mexican pesos (Ps.) in purchasing power as of September 30, 2002.

    First Nine Months Results 

Total revenues for the first nine months of 2002 increased 6.6%, to Ps.9,168 million, which include approximately Ps.1,628 million of Electropura five-gallon jug revenues.

Gross profit increased 9.2% and was Ps.5,302 million. Gross margin as a percentage of total revenues increased to 57.8% from 56.4% during the comparable year-ago period.

Operating income increased 14.4% or Ps.134 million and reached Ps.1,068 million. Operating income as a percentage of total revenues increased almost one percentage point, reaching 11.7% during the first nine months of 2002.

For the first nine months, EBITDA increased 13.6% or Ps.185 million, reaching Ps.1,546 million, and EBITDA as a percentage of total revenues reached 16.9%.

Other expenses were Ps.119 million, which include severance payments for Ps.23 million, asset write-offs for Ps.16 million and goodwill amortization for Ps.80 million.

Integral cost of financing was Ps.474 million for the first nine months of 2002. Foreign exchange loss was Ps.378 million due to a devaluation of the peso, which had an exchange rate at the end of September of Ps.10.214 pesos per dollar, compared to Ps.9.16 pesos per dollar at the end of December. The first nine months inflation rate resulted in a monetary gain of Ps.135 million. For the first nine months of the year, interest paid was Ps.238 million and interest earned was Ps.7 million.

Net income after tax for the first nine months of 2002 was Ps.162 million or US$16 million, equivalent to US$0.18 per GDS.

Total outstanding debt at the end of September 2002 was reduced to US$288 million from US$363 million at the end of December, 2001. Cash and cash equivalents was Ps.98 million.

During the first nine months of 2002, Pepsi-Gemex made capital expenditures of approximately US$40 million in several categories.

    Third Quarter Results 

Total revenues for the quarter increased 1.8%, to Ps.3,098 million, which include approximately Ps.514 million of Electropura five-gallon jug revenues.

Gross profit increased 3.1% and was Ps.1,733 million. Gross margin as a percentage of total revenues reached 55.9% from 55.2% during the comparable year-ago period, primarily as a result of higher purified water sales.

Operating income was Ps.283 million. Operating income as a percentage of total revenues was 9.1% during the third quarter 2002.

EBITDA increased 1.5% or Ps.7 million, reaching Ps.447 million for the third quarter and EBITDA as a percentage of total revenues was 14.4%.

Other expenses for the quarter were Ps.34 million, which include severance payments for Ps.7 million, asset write-offs for Ps.2 million and goodwill amortization for Ps.25 million.

Integral cost of financing was Ps.113 million for the quarter. Foreign exchange loss was Ps.74 million due to a devaluation of the peso, which had an exchange rate at the end of September of Ps.10.214 pesos per dollar, compared to Ps.9.965 pesos per dollar at the end of June. The third quarter inflation rate resulted in a monetary gain of Ps.51 million. For the third quarter, interest paid was Ps.95 million and interest earned was Ps.4 million.

Net loss after tax was Ps.20 million for the third quarter of 2002.

Pepsi-Gemex’s current operations encompass the Mexico City metropolitan area, and portions of the adjacent states of Mexico, Hidalgo, Queretaro and Guanajuato, the southwestern states of Guerrero and Morelos, the southeastern states of Campeche, Yucatan and Quintana Roo, the central states of Aguascalientes, Zacatecas, Durango and San Luis Potosi, and the Northeastern states of Nuevo Leon, Coahuila, Tamaulipas and portions of the states of Chihuahua and Veracruz.

Pepsi-Gemex is one of Mexico’s largest soft drink producers. The Company produces Pepsi, Mirinda, KAS, Seven-Up, Manzanita Sol, Power Punch, Garci Crespo and San Lorenzo mineral waters and Squirt. The Company also offers Seagram products to its customers and owns Mexico’s largest purified water company, Electropura. Pepsi-Gemex shares trade on the Mexican Stock Exchange and the New York Stock Exchange.

This release may contain forward-looking statements. Such forward-looking statements, which reflect the Company’s current views of future events and financial performance, involve known and unknown risks and uncertainties that may cause the Company’s actual results to be materially different from planned or expected results. Those risks and uncertainties include but are not limited to: competition, consumer demand, seasonality, economic conditions and government activity. Investors should take such risks into account when making investment decisions.

PEPSI-GEMEX, S.A. DE C.V.
CONSOLIDATED STATEMENTS OF INCOME
IN MILLIONS OF CONSTANT MEXICAN PESOS AS OF SEPTEMBER 30, 2002
(10.2140 Pesos=US$1.00)
                       3 Months Ended         3 Months Ended
                     September, 30 2002  %    September, 30 2001  %
Total Volume (MM’s
 8oz. Cases)                     101.1                     97.9
Soft Drinks (MM’s
 8oz. Cases)                      92.7                     90.9
Bottled Water (MM’s
 8oz. Cases)                       8.4                      7.0
Water Jug (MM’s 19
 Lts. Jugs)                       27.3                     25.1
Total Revenues                   3,098 100.0%             3,043 100.0%
Cost of Sales                    1,366  44.1%             1,362  44.8%
Gross Profit                     1,733  55.9%             1,681  55.2%
Operating Expenses               1,286  41.5%             1,241  40.8%
EBITDA(1)                          447  14.4%               440  14.5%
Depreciation &
 Amortization                      164   5.3%               129   4.2%
Operating Income                   283   9.1%               312  10.2%
Other Expenses                      34   1.1%                22   0.7%
Integral Cost of
 Financing                         113   3.7%               235   7.7%
   Net Interest
    expense                         91   2.9%                80   2.6%
   Foreign exchange
    loss (gain)                     74   2.4%               214   7.0%
   Monetary position
    gain                           (51)(1.6%)               (59)(1.9)%
Income before tax                  136   4.4%                56   1.8%
Deferred tax                       (37)(1.2%)                25   0.8%
Tax                                192   6.2%                30   1.0%
Net Income                         (20)(0.6%)                 1   0.0%
	   (1) EBITDA, for Mexican GAAP purposes, is defined as operating
income plus depreciation and amortization (including amortization of
bottles and cases). EBITDA should not be construed as an alternative
to (a) consolidated net income as an indicator of our operating
performance or (b) cash flows from operating activities, financing
activities and investing activities as a measure of our liquidity. Our
definition of EBITDA may not necessarily be comparable to other
companies’ definitions of EBITDA.
PEPSI-GEMEX, S.A. DE C.V.
CONSOLIDATED STATEMENTS OF INCOME
IN MILLIONS OF CONSTANT MEXICAN PESOS AS OF SEPTEMBER 30, 2002
(10.2140 Pesos=US$1.00)
                    9 Months Ended           9 Months Ended
                    September, 30 2002   %    September, 30 2001  %
Total Volume (MM’s
 8oz. Cases)                    298.3                     278.5
Soft Drinks (MM’s
 8oz. Cases)                    270.5                     256.5
Bottled Water (MM’s
 8oz. Cases)                     27.8                      22.0
Water Jug (MM’s 19
 Lts. Jugs)                      80.8                      73.4
Total Revenues                  9,168  100.0%             8,603 100.0%
Cost of Sales                   3,866   42.2%             3,750  43.6%
Gross Profit                    5,302   57.8%             4,853  56.4%
Operating Expenses              3,755   41.0%             3,492  40.6%
EBITDA(1)                       1,546   16.9%             1,362  15.8%
Depreciation &
 Amortization                     478    5.2%               428   5.0%
Operating Income                1,068   11.7%               934  10.9%
Other Expenses                    119    1.3%               112   1.3%
Integral Cost of
 Financing                        474    5.2%               140   1.6%
   Net Interest
    expense                       231    2.5%               306   3.6%
   Foreign exchange
    loss (gain)                   378    4.1%               (25)(0.3)%
   Monetary position
    gain                         (135) (1.4%)              (141)(1.7)%
Income before tax                 477    5.2%               681   7.9%
Deferred tax                       57    0.6%               112   1.3%
Tax                               258    2.8%               128   1.5%
Net Income                        162    1.8%               441   5.1%
	   (1) EBITDA, for Mexican GAAP purposes, is defined as operating
income plus depreciation and amortization (including amortization of
bottles and cases). EBITDA should not be construed as an alternative
to (a) consolidated net income as an indicator of our operating
performance or (b) cash flows from operating activities, financing
activities and investing activities as a measure of our liquidity. Our
definition of EBITDA may not necessarily be comparable to other
companies’ definitions of EBITDA.
PEPSI-GEMEX, S.A. DE C.V.
CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2002 AND DECEMBER 31,
 2001
IN MILLIONS OF CONSTANT MEXICAN PESOS AS OF SEPTEMBER 30,
2002
(10.2140 Pesos=US$1.00)
                                       September, 2002  December, 2001
Current Assets                                   1,366           1,661
           Cash and cash equivalents                98             103
Property, Plan & Equipment (net)                 7,261           7,078
Goodwill & Deferred Assets                       1,519           1,924
Other Assets                                        63              65
Total Assets                                    10,209          10,728
Short Term Debt                                     29             391
Other Liabilities                                1,429           1,312
Current Liabilities                              1,458           1,703
Long Term Debt                                   2,916           3,056
Other Liabilities                                1,425           1,129
Long Term Liabilities                            4,341           4,185
Total Liabilities                                5,799           5,888
Stockholder’s Equity                             4,410           4,840
Total Liabilities & Stockholder’s
 Equity                                         10,209          10,728

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