WMMVY Wal Mart de Mexico SAB de CV (QX)

By Anthony Harrup 

MEXICO CITY -- Net profit at Wal-Mart de Mexico SAB rose 23% in the fourth quarter on higher sales and cost control efforts.

Mexico's biggest retailer, which also runs stores in Central America, on Wednesday reported net profit for the October-December quarter of 10.4 billion Mexican pesos ($514 million), compared with 8.5 billion pesos a year earlier.

Revenue increased 12% to 157.5 billion pesos and earnings before interest, taxes, depreciation and amortization, or Ebitda, a measure of operating cash flow, climbed 21% to 15.5 billion pesos.

Costs and expenses grew less than sales in Mexico, contributing to higher profit margins.

The quarter closed a solid year for Walmex, as the unit of Bentonville, Arkansas-based Wal-Mart Stores Inc. is known. Full-year sales grew 12% from 2015, thanks to strong household consumption in Mexico, where employment and wage growth were coupled with low inflation, and to gains in Central American currencies against the Mexican peso.

In constant currency terms, fourth-quarter sales rose 8.9% in Mexico and 9% in Central America. Same-store sales, excluding stores opened in the past year, rose 7.9% in Mexico and 5% in Central America.

An increase in remittances from Mexicans living abroad helped results in Mexico, although Walmex also gained market share from its main competitors with higher growth than that reported by retail association Antad, of which Walmex is a member, said Chief Executive Guilherme Loureiro in a webcast presentation.

"We continue to see consistent and sustainable growth in all the countries where we operate," he said.

The results were roughly in line with the median estimates of analysts polled by The Wall Street Journal, which called for net profit of 10 billion pesos on sales of 157.5 billion pesos and Ebitda of 15.8 billion pesos.

Walmex shares traded on the Mexican stock exchange slipped 0.1% to 39.55 pesos before the release of the earnings.

The company said it plans to pay dividends this year equivalent to 2.50 pesos per share, including 0.96 pesos per share related to the pending sale of its Suburbia clothing store chain.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

February 15, 2017 18:34 ET (23:34 GMT)

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