Mexico's Genomma Falls Most on IPC After Reducing Sales Forecastby
Retailers in Mexico are cutting back on inventory they hold
Genomma sees 2015 Mexico sales tumbling 37% from 2014
Genomma Lab Internacional SAB fell the most on Mexico’s benchmark stock index after the company cut the 2015 revenue outlook and said it’s reducing inventories held by retailers in its home market because of tumbling local sales.
The drug maker said during a presentation to investors that it now expects 2015 sales to drop 5.4 percent to 10.9 billion pesos ($637 million). In a July interview, Genomma Chairman Rodrigo Herrera stood by a projection that called for revenue growth of 5.2 percent to 12.1 billion pesos.
Tuesday’s stock decline snapped nine straight days of advances for the company, which has been trying to regain investor confidence by cutting debt, separating the chairman and CEO roles, as well selling a controlling stake in distribution unit Grupo Comercial e Industrial Marzam SAPI. Chief Executive Officer Maximo Juda said in a statement that the company is focusing on its international operations, where sales will grow 30 percent this year, compared with a 37 percent decline in Mexico.
Genomma tumbled 4.5 percent to 16.31 pesos at 1:30 p.m. in Mexico City, and earlier fell 6.6 percent for the biggest intraday decline since Aug. 24.
The company also said Tuesday that it completed the sale of the majority stake in Marzam to Moench Cooperatief UA, receiving 1.05 billion pesos. The company said it expected to generate 560 million pesos of free cash flow in 2015. In March, the company estimated that after selling its majority stake in Marzam and buying back shares it would have a final free cash flow of 2.1 billion pesos this year.