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FEMSA ANNOUNCES SECOND QUARTER AND FIRST HALF RESULTS

 MEXICO CITY, July 28 /PRNewswire/ -- Fomento Economico Mexicano, S.A de C.V. or FEMSA (FEMSYP: PORTAL), Mexico's leading producer of beer and soft drinks, today announced results for the second quarter and first half ended June 30, 1993.
 Revenues for the second quarter of 1993 increased to NPs. 1,972 million, 8.8 percent greater in real terms than that reported for the same period in 1992. This increase can be attributed to a 2.1 percent growth in volume of beer sales and a 12.8 percent growth in volume of soft drink sales.
 Operating margin increased 18.8 percent in real terms as a result of a growth in volume sales despite a 1.0 percent increase in the cost of sales. Operating margin increased to 47.1 percent of sales during the second quarter of 1993 from 43.1 percent for the same period in 1992. However, as a consequence of launching new products and presentations in the beer and soft drink businesses, operating costs increased 21.8 percent when compared with the same period in 1992.
 Operating income for the second quarter of 1993 increased 11.1 percent in real terms to NPs. 250 million from NPs. 225 million reported during the same period in 1992.
 Net income in the second quarter was NPs. 101 million. Based on 541,380,000 shares outstanding, net earnings per share were 0.186 New Pesos.
 Integral cost of financing reflects real interest rates which have increased significantly due to the lower inflation rate but the still relatively high nominal interest rates. This important growth in the integral cost of financing caused net profit in the second quarter 1993 to decrease from that reported during the same period in 1992.
 Consolidated revenues for the six months ended June 30, 1993 increased to NPs. 3,584 million, or 7.5 percent in real terms, compared with that reported during the same period in 1992.
 Operating margin for the six months ended June 30, 1993 increased 15 percent when compared with the same period in 1992, as a result of lower input, production and freight costs. However, operating income increased by 9.2 percent to NPs. 385 million from that reported during the same period in 1992.
 The gain in operating profit greatly compensated for the increase in real interest rates. However, net profit for the first half of 1993 decreased by 3.8 percent to NPs. 153 million from the same period of 1992. Based on 541,380,000 shares in circulation, net earnings per share were NPs. 0.379. Consolidated net profit in 1992 includes extraordinary profit resulting from the sale of the mineral water business in April 1992.
 Operating Highlights
 Volume beer sales grew by 4 percent in the first half of 1993. Non- returnable presentations represented 23 percent of this volume, increasing 1.7 percentage points from the same period last year.
 Volume sales of the XX Lager brand for the first half of 1993 increased 54 percent when compared with the same period in 1992, as a result of the introduction of AA Lager in a can. XX Lager in can is now available throughout Mexico except in Sonora, Sinaloa and Baja California Sur where it will be available by the third quarter of 1993.
 Only seven months after its introduction, Tecate Light is available nationwide and represents 11 percent of volume sales of beer in cans for FEMSA and 5.4 percent of volume sales in cans for the industry, or 1.5 percent market share.
 Volume sales in the soft drink business grew 10.7 percent for the first half of 1993 over the same period in 1992. Industry growth for this period was 5.8 percent. Market share for the colas grew by 4.9 percentage points to 56.6 percent in the Valley of Mexico and by 1.1 percentage points to 71.8 percent in the Southeast for the first half of 1993, compared with the same period last year. Promotions in both franchises and product launches in the Southeast for the large size Coca-Cola and the half liter Fanta continue.
 Oxxo convenience stores continue their expansion program to open 71 new stores during the first half of 1993, to achieve a total of 575 stores and a sales area of 63 thousand square meters.
 Recent Developments
 On June 21, 1993, an agreement was signed with the Coca-Cola Company, from which FEMSA received U.S. $195 million for a 30 percent stake in Coca-Cola Femsa, S.A de C.V. (formerly Femsa Refrescos, S.A de C.V.). Revenues received from this transaction were used to pay short term debt. The financial structure of Femsa was strengthened subsequently improving the leverage ratio from 1.0 in December 1992 to 0.8 in June 1993 and improving the liquidity ratio from 1.07 to 1.35.
 FEMSA is the largest beverage and packaging company in Mexico, with export positions in the United States and Europe. Founded in 1890, FEMSA produces and distributes name brands of beer including Tecate, Dos XX, Carta Blanca, Bohemia and Superior, and soft drinks, including Coke, Diet Coke, Sprite and Fanta. FEMSA also operates an extensive chain of Oxxo convenience stores throughout Mexico.
 FOMENTO ECONOMICO MEXICANO, S.A. DE C.V. AND SUBSIDIARIES
 Consolidated Income Statement
 (Amounts in million of New Pesos)
 First Semester Second Quarter
 Cumulative Figures
 Non-audited Amounts April-June April-June
 1993 1992 1993 1992
 Total revenues $3,584 $3,334 $1,972 $1,815
 Cost of sales 1,935 1,900 1,041 1,031
 Gross profit 1,649 1,434 931 784
 Expenses:
 Administrative 494 471 249 249
 Selling 757 596 423 302
 Total operating
 expenses 1,251 1,067 672 551
 Income from
 operations 398 367 259 233
 Pension plan cost (13) (14) (9) (8)
 Total income from
 operations 385 353 250 225
 Integral cost of
 financing 84 43 90 51
 Other expenses,
 net (23) (5) (16) 2
 Income for the period
 before income tax, tax
 on assets, employee profit
 sharing and extraordinary
 items 278 305 144 176
 Income tax, tax on
 assets and employee
 profit sharing 125 146 63 84
 Comparable net
 income 153 159 81 92
 Mineral Waters
 business net
 income -- 20 -- 2
 Income before
 extraordinary
 items 153 179 81 94
 Credit from utilization
 of tax loss
 carryforward 52 54 20 30
 Extraordinary
 items -- 600 -- 600
 Net income for
 the period $ 205 $ 833 $ 101 $ 724
 -0- 7/28/93
 /CONTACT: Hernan Miguel of FEMSA, 011-5283-40-10-92, or Cathleen Mayrose of Dewe Rogerson, 212-688-6840, for FEMSA/


CO: Fomento Economico Mexicano, S.A. de C.V. ST: IN: SU: ERN

LD-TM -- NY115 -- 7015 07/28/93 18:30 EDT
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Date:Jul 28, 1993
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