Despite a difficult global economic environment some of Mexico’s biggest companies plan to invest about 246 billion pesos, about US $12.4 billion, this year, an amount that is just about the same as last year.
Mining company Fresnillo has announced it will invest $800 million, almost double last year’s figure. The firm expects to benefit from a stronger dollar in 2017.
Restaurant operator Alsea is another firm that plans to bump its 2017 capital expenditures, with a budget between 4 billion and 4.5 billion pesos for expansion, 30% more than last year.
Grupo Lala, Latin America’s largest dairy company, will boost its 2016 investment by 24% to 3.6 billion pesos.
A number of other firms will maintain this year’s investments at 2016 levels. Among them: beverage and retail company Femsa, at $1.3 billion; Grupo Bimbo, a multinational bakery, at $650 million to $750 million; and food and beverage company Grupo Herdez, 1 billion pesos.
Arca Continental, a food and beverage company and the world’s third largest bottler of Coca-Cola, has not officially announced its capital expenditure plans for 2017 but company sources predict it will be greater than last year’s 7 billion pesos.
Broadcaster Televisa and communications giant América Móvil will reduce their investment spending by 32% and 10%, respectively.
An analysis of the Mexican Stock Exchange’s benchmark index by the newspaper El Universal found that Mexican firms had strong results last year, with double-digit growth in sales and earnings.
The IPC, an index made up of 35 companies, showed a 12.9% increase in sales and a 20.5% increase in net earnings over 2015.
One analyst said a weaker peso contributed to the stronger sales results but warned that this year will be challenging due to macroeconomic factors. One of the biggest risk factors, said Banco Multiva analyst Areli Villeda, was the renegotiation of the North American Free Trade Agreement.
This year’s financial results will be more moderate, predicted Carlos González of Grupo Financiero Monex, suggesting that first-quarter results will reflect a decline.
Source: El Universal (sp)