UPDATE 4-Mexican bottler Arca eyes price increases in 2022 as Q4 profit jumps
(Adds details from investor call)
By Kylie Madry and Noe Torres
MEXICO CITY, Feb 15 (Reuters) - Mexican bottler Arca Continental attributed a 26.5% rise in fourth-quarter net profit to high demand Tuesday, as it announced plans to increase prices in line with inflation in 2022.
Earnings before interest, tax, depreciation and amortization (EBITDA) for the year rose to 35.4 billion pesos ($1.72 billion), just above the Refinitiv estimate of 35.1 billion pesos ($1.71 billion).
The company, one of the largest bottlers of Coca-Cola beverages in Latin America, reported revenues of 183.4 billion pesos ($8.9 billion) and a net profit of 12.3 billion pesos ($735 million) for the whole year.
"As for revenues, we expect an increase around 6% to 8% (through 2022)," Executive Director Arturo Gutierrez said in a call with investors.
Arca Continental's shares gained more than 3% by midday after the results.
"We will continue adjusting prices to at least offset inflation rate at each of our operations, always ensuring that our products remain affordable," Gutierrez said.
Arca Continental's sales rose to 49.1 billion pesos for the fourth quarter from 44.9 billion pesos in the same period in the previous year.
"Our great team's ability to face challenging environments allowed us to generate volumes above pre-pandemic levels in 2021, and to increase annual sales by 8.3%," Gutierrez said earlier in the results statement.
The bottler said it hopes to recoup market hits from the COVID-19 pandemic through the year, particularly in the on-premise sector in the United States, and aims to increase digital sales.
Actinver senior analyst Jeronimo Cobian said the results were in line with previous estimates. He said price increases had helped the company's performance, though profit was pressured by the increasing cost of goods and labor throughout the industry.
Gutierrez said the company planned to have lower raw material costs through the year, despite industry increases, due to hedging purchase prices. ($1 = 20.5075 pesos at end-December) (Reporting by Kylie Madry and Noe Torres; editing by Cassandra Garrison, Kevin Liffey and Jane Merriman)
