Cuervo Q4 profits slump 48.5% on agave costsBy Kristiane Sherry
Mexico-based drinks group Jose Cuervo saw its fourth quarter profits tumble 48.5% year-on-year as rising agave prices started to bite.
The Tequila maker reported quarterly profits of 629.1 million pesos (about US$31m), down from 1.221 billion pesos (US$61m) for the same period the previous year, reports Reuters.
Despite the profitability slump, driven by 84% increases in the cost of agave, the company said, revenues reached 7.38bn pesos (US$368.4m) for the fourth quarter, representing 52.4% gains year-on-year.
Jose Cuervo, which is controlled by the Beckmann family, raised around US$790m in its IPO last month.
Shares sold for 34 pesos each, at the top end of estimates given at investor presentations in the run-up to the floatation.
Cuervo twice delayed its IPO due to market volatility surrounding the US election, which saw Donald Trump become president.
Trump policies have since stirred up further uncertainty. In January, he announced plans to impose a 20% tax on imports from Mexico, including Tequila, as a row over who should pay for a proposed US$15 billion border wall between the two nations continued.