Becle profits soar nearly fivefold as peso drop boosts Tequila giant
Becle, the Mexican owner of the Jose Cuervo brand, has posted a dramatic jump in third-quarter profit, far exceeding analysts’ expectations. A weaker peso and strong global demand helped the world’s largest Tequila producer strengthen its financial position despite industry volatility.
Hard on the heels of announcing a significant surge in sales in the three months to the end of August, Becle, the Mexican owner of the Jose Cuervo family of Tequilas, has posted a nearly fivefold jump in its third-quarter profit, surpassing analysts’ forecasts.
The world’s largest producer of Tequilas said it had generated solid results and further strengthened its financial position, “despite continued volatility in the global spirits industry.”
Profits for the quarter were 4.13 billion pesos (US$225 million), well above the 1.27 billion consensus forecast of analysts. Revenues held steady at 10.92 billion, broadly in line with analysts’ 10.95 billion estimate.
Peso decline lifts profitability
Much of the soaring profit can be attributed to the plunging value of the peso, which helped reduce its dollar-denominated debt exposure.
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As announced just a week ago, the company’s volumes in Mexico and most of its international markets rose by almost 20% in the quarter compared to a year earlier, but sales volumes fell by 6% in the United States and Canada, where the company makes around 60% of sales.
Tariff concerns weigh on exporters
Mexico’s spirits sector, which relies heavily on exports to the United States, has been hit hard this year by a series of tariff threats from Washington, hitting small-scale distillers the hardest.
Most of the country’s industries have nevertheless been spared the brunt of US tariffs thanks to the free trade pact with the US, which comes up for review next year.
Tequila exports to the US surge
Last year, the US imported US$5.3 billion worth of Tequila, according to the US Distilled Spirits Council, up more than 14% in a year and surpassing all its whiskey, gin, rum, brandy and vodka imports combined.
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