January 28, 2011 / 5:51 PM / in 7 years

PREVIEW-Grupo Mexico Q4 profit may rise on copper volumes

 * WHAT: Grupo Mexico’s fourth-quarter results
 * WHEN: The week starting Jan. 31
 * REUTERS FORECAST: Net profit seen up 55 percent
 MEXICO CITY, Jan 28 (Reuters) - Copper miner and railroad operator Grupo Mexico’s fourth-quarter profit likely will rise 55 percent as copper sales increased and the rail division hauled more cargo.
 Grupo Mexico (GMEXICOB.MX)  should report fourth-quarter net profit of $532 million, compared with $342 million in the quarter a year earlier, according to the average forecast of five analysts consulted by Reuters.
 Copper prices rose nearly 30 percent in the quarter and Grupo Mexico’s copper sales likely rose 35.4 percent from the re-incorporation of Arizona-based miner Asarco, said Rodrigo Heredia of Mexican bank IXE.
 Asarco was under Grupo Mexico’s control until it fell into bankruptcy under the burden of environmental claims. Grupo Mexico pulled the U.S. miner out of bankruptcy and took control in December 2009, beating out rival bids.
 Now Grupo Mexico wants to merge Asarco with its Southern Copper (SCCO.N) mining unit, which reports quarterly results before its parent company.
 “This year the outlook for the mining industry in general is good, especially for copper. We expect demand to continue rising from increased consumption in the United States, Europe and emerging markets,” Heredia said in a research note.
 The first copper production is also expected from the massive Cananea mine in northern Mexico, reopened last year after a three-year strike.
 Grupo Mexico controls most of Mexico’s railroad network and growth may come from cargo volumes and sales. The company is interested in expanding its infrastructure business, possibly offering shares of its railroad Ferromex and eyeing a new airport along the Riviera Maya tourist strip near Cancun.
 Grupo Mexico said this week in filings with the U.S. Securities and Exchange Commission that it has a 19.5 percent stake in Mexican airport operator Grupo Aeroportuario del Pacifico, or GAP (GAPB.MX). [ID:nWNAB6917]
Below is a table of the average forecast for quarterly sales, net profit and earnings before interest, taxes, depreciation and amortization (EBITDA).
All figures are in U.S. dollars.    ===============================================================
                   2010             2009        PERCENTAGE
                   OCT-DEC          OCT-DEC        CHANGE -------------------------------------------------------------- Revenue              2.286 bln       1.486 bln        +53 pct EBITDA               1.199 bln         694 mln        +72 pct Net Profit             532 mln         342 mln        +55 pct ===============================================================  (Reporting by Mica Rosenberg; Editing by Robert MacMillan)   

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