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July 24, 2012

MEXICO: Walmex H1 profits up on higher sales

Wal-Mart de Mexico, the US retailer's arm in Central America, has reported a 7% increase in half-year profits on the back of higher sales.

By Dean Best

Wal-Mart de Mexico, the US retailer’s arm in Central America, has reported a 7% increase in half-year profits on the back of higher sales.

The company booked net profit of MXN9.64bn (US$703.4m) for the six months to the end of June. Operating income was up 10% at MXN13.6bn.

The retailer, which operates over 2,400 stores in Mexico and across Central America, reported a 13% increase in net sales to MXN193.37bn. It opened 109 retail stores in the first half of 2012.

Earlier this year, the company, also known as Walmex, found itself at the centre of bribery allegations that covered part of the last decade.

The New York Times reported a former Walmex executive told a senior Wal-Mart Stores lawyer in 2005 the Mexican retailer had bribed officials to obtain permits to open stores.

The newspaper said Wal-Mart sent investigators to Mexico City and discovered evidence of bribery. However, after being presented with the evidence, the world’s largest retailer decided to end the investigation, the newspaper said.

Walmex has been investigating the claims and Mexico’s attorney general also launched a probe into the allegations.

Commenting after reporting its half-year results yesterday, Walmex said it was “participating in an independent investigation into possible corrupt practices” started by Wal-Mart and “revisions into similar matters by the competent authorities”.

It added: “Although Walmex does not presently believe, based on the information currently available and the advice of its external Mexican counsel, that these matters will have a material adverse effect on its business, given the inherent uncertainties in such situations, Walmex can provide no assurance that these matters will not be material to its business in the future.”

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