(Adds revenue, reason for profit drop)
MEXICO CITY Feb 28 Higher agave prices weighed
on fourth quarter profits at Mexico's Jose Cuervo which slumped
48.5 percent year-on-year even though the world's biggest
tequila maker reported a 52.4 percent spike in revenues on
The company, officially known as Becle SA de CV,
posted a quarterly profit of 629.1 million pesos ($30.5
million), compared with 1.221 billion in the fourth quarter of
Cuervo said the cost of sales rose 84 percent year-on-year,
due to increases in the price of agave from third parties and
accounting effects related to inventories. Agave is the key
ingredient in making tequila.
However, the company posted revenues of 7.38 billion pesos
in the fourth quarter, a 52.4 percent increase over the 4.84
billion pesos it raked in during the last quarter of 2015.
Cuervo, controlled by the Beckmann family, boasts some 30
percent of the global tequila market, with over 60 percent of
its sales in the United States and Canada.
It raised 18.6 billion Mexican pesos ($933.64 million) in
its initial public offering this month, the company said, after
putting the IPO on hold twice last year as U.S. President Donald
Trump's march to the White House gathered strength, sending the
peso to record lows.
Trump has threatened to slap a hefty tax on products Mexico
sends to the United States to pay for a border wall, as well as
tear up a joint trade deal with Mexico.
Started by Jose Antonio de Cuervo in 1758 before Mexican
independence from Spain, Cuervo says it is North America's
oldest continuous producer of spirits.
($1 = 20.64 pesos end December 2016)
($1 = 19.9220 Mexican pesos)
(Reporting By Alexandra Alper and Veronica Gomez; Editing by