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 MEXICO CITY, July 29 /PRNewswire/ -- During the first six months of 1993, Grupo Gigante's sales amounted to N$3,482,714 thousand new pesos, a 24.0 percent increase in real terms over the N$2,809,408 thousand new pesos reported in the same period of 1992.
 For the first half of 1993, operating expenses increased by 32.8 percent, amounting to 20.8 percent of sales, compared to 19.4 percent of sales during the same period of 1992. This increase was mainly due to advertising and promotion campaigns the group has conducted to meet the demands of the intensely competitive environment that prevails in Mexican retailing. In addition, we have continued incorporating Blanco's units into Grupo Gigante's operations.
 Operating earnings for the January-June period amounted to N$54,580 thousand new pesos, a 41.4 percent decrease compared to N$93,133 thousand new pesos reported in the same period of 1992. As a percentage of sales, the group's operating margin decreased from 3.3 percent in the first half of 1992 to 1.6 percent in the first half of 1993. It is encouraging to note that the group's operating margin for the second quarter of 1993 was 1.7 percent of sales, an improvement with respect to the 1.4 percent of the first quarter of this year, and the 1.1 percent for fiscal 1992.
 Net earnings for the first six months of 1993 were N$42,636 thousand new pesos compared to N$106,483 thousand new pesos reported in the first half of 1992. The earnings were affected by the reduction in the benefit provided by the Integral Results of Financing (IRF) which decreased from N$30,382 thousand new pesos in 1992 to N$4,617 thousand new pesos in 1993. The main cause for the decrease in IRF's benefit is the incorporation of Blanco's high level of indebtedness.
 The results for the first six months of 1993 include the consolidation of the Blanco acquisition to reflect Grupo Gigante's majority ownership position only as of March 12, 1993.
 One of the most important events of the second quarter of 1993 was a capital increase that took place through a rights issue at the end of May. More than N$400,000 thousand new pesos were raised and the funds were used to reduce Blanco's indebtedness. We expect the positive effects of this capital increase will show in future quarters due to the reduction in interest payments.
 During the second quarter of 1993, the group opened 2 Gigante stores (1 in Aguascalientes and 1 in Guadalajara) thus reaching 150 Gigante units in operation; 1 SuperMart in Irapuato (2 units now in operation); and 1 Toks coffee shop in Toluca (31 restaurants now in operation).
 (Thousands of New Pesos)(B)
 Period ended Percent
 June 30, 1993 1992 Change
 Accrued Results
 Net sales NP 3,482,714 NP 2,809,408 24.0
 Operating earnings 54,580 93,133 -41.4
 Integral Result of Financing (4,617) (30,382) -84.8
 Tax and employee profit
 sharing provision 17,599 17,032 3.3
 Consolidated net earnings 42,636 106,483 -60.0
 Financial Position
 Total assets 4,832,194 2,998,079 61.2
 Current assets 1,827,653 995,900 83.5
 Inventories 761,530 528,395 44.1
 Others 1,066,123 467,505 128.0
 Non-current assets 3,004,541 2,002,179 50.1
 Total liabilities 2,183,582 711,060 207.1
 Current liabilities 2,183,582 711,060 207.1
 Trade accounts payable 983,457 491,338 100.2
 Bank loans 726,308 136,979 430.2
 Other liabilities 473,817 82,743 472.6
 Long term liabilities 0 0 0.0
 Shareholders' Equity 2,648,612 2,287,019 15.8
 Financial Ratios
 Inventory turnover(days) 51 44
 Trade accounts payable turnover(days) 66 41
 Net earnings per share (new pesos)(A) 0.02 0.11
 Operating earnings/sales (percent) 1.6 3.3
 IRF/sales (percent) -0.1 -1.1
 Net earnings/sales (percent) 1.2 3.8
 Total liabilities/stockholders equity
 (percent) 82.4 31.1
 Current assets/current liabilities
 (times) 0.84 1.40
 (A) Earnings for last 12 months. Basis 2,201,641,481 shares.
 (B) New Mexican pesos of purchasing power at June 30, 1993.
 -0- 7/29/93
 /CONTACT: Juan Carlos Mateos of Grupo Gigante, 52-5-724-8369, or John McInerney of Dewe Rogerson, Inc., 212-688-6840, for Grupo Gigante/

CO: Grupo Gigante ST: IN: REA SU: ERN

LD-OS -- NY111 -- 7460 07/29/93 17:29 EDT
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Publication:PR Newswire
Date:Jul 29, 1993

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