UPDATE 3-Mexico's Femsa fourth-quarter profits dip, shares slide
(Adds move in shares in paragraph 2, changes in management in paragraph 7, capex opportunities in paragraphs 10-11)
MEXICO CITY, Feb 23 (Reuters) - Mexican bottler and retailer Femsa posted on Friday a nearly 18% fall in its fourth-quarter net profit, compared with the year-ago period, hit by higher sales and labor costs in Mexico and a decline in its health business unit.
The company's shares slid over 8% after results were published.
Femsa's quarterly profits reached 3.27 billion pesos ($193 million), while cost of sales surged 21%.
Revenue for the company, which controls one of the world's largest Coca-Cola bottlers and a sprawling chain of Oxxo convenience stores, climbed 4.6% to reach nearly 190 billion pesos.
Revenues for the period showed slower growth versus the 23% jump seen last year, dragged down by a 150-basis-point contraction in margins from its Oxxo operations across Latin America.
Femsa's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the quarter rose 3.6% to total nearly 27 billion pesos.
In a separate filing, the company announced that Chief Financial Officer Eugenio Garza y Garza is stepping down and will be replaced by Martin Arias.
The retailer's capital expenditures last year stood at about 39 billion pesos.
Earlier this month, Femsa said it expects to spend over 237 billion pesos over the next five years to grow its business and return capital to shareholders.
Capital expenditures will be allocated mainly to ventures in distribution, Femsa's head of investor relations, Juan Fonseca, said on an earnings call.
He added that the company is evaluating opportunities to enter the U.S. convenience store market.
Femsa said it will return about 6% of its market value to shareholders in the next two or three years, though analysts have noted that the figure undershoots market expectations.
A series of asset sales this year, part of a plan to reduce debt and focus on its core businesses, will also likely be finalized in 2024. ($1 = 16.9666 pesos at end of December) (Reporting by Valentine Hilaire and Noe Torres; Editing by David Alire Garcia, Jan Harvey and Jonathan Oatis)
