Coca Cola Femsa S.A.B. de C.V. (NYSE:KOF) Q2 2019 Earnings Conference Call Transcript
Jul 25, 2019 • 10:00 am ET
Good morning, everyone, and welcome to Coca-Cola FEMSA Second Quarter 2019 Conference Call. As a reminder, today's conference is being recorded. [Operator Instructions] At the request of the company, we will open the conference up for questions and answers after the presentation.
During this conference call, management may discuss certain forward-looking statements concerning Coca-Cola FEMSA's future performance and should be considered as good faith estimates made by the company. These forward-looking statements reflect management's expectations that are based on -- upon currently available data. Actual results are subject to future events and uncertainties, which can materially impact the company's actual performance.
And now at this time, I'd like to turn the conference over to Mr. John Santa Maria, Coca-Cola FEMSA's, Chief Executive Officer. Please go ahead, sir.
John Santa Maria
Thank you. Good morning, everyone, and thank you for joining us to discuss our second quarter results. Constantino Spas, our CFO; and Maria Dyla Castro, our Investor Relations Director, are also with us today. I am pleased to report solid second quarter results, showing our continuous progress and positive momentum. In Mexico and Central America, we generated strong top and bottom line growth, driven by our steady, balanced revenue growth, a more stable raw material environment and cost and expense efficiencies. Despite currency headwinds, our South America division achieved positive top line performance driven by strong volume growth in Brazil and healthy pricing across the division.
With better-than-expected buying in Colombia and early signs of macroeconomic stabilization in Argentina, we are encouraged as we enter the second half of the year. For the quarter, we delivered solid consolidated top line growth of close to 8%, while our comparable revenues grew double digits, 11.6%. This growth was driven mainly by volume growth in Brazil, Colombia and Central America, pricing above inflation and positive mix trends across many of our operations. Importantly, we delivered these strong results despite unfavorable translation effects from all of our operating currencies into Mexican pesos.
Our operating income increased 6.5%, while our comparable operating income rose 13.8%. This growth was driven by healthy top line results, expense efficiencies in Mexico and Brazil and more stable sweetener PET cost environment overall. These effects were partially offset by higher a concentrate cost in Mexico, the reduction of tax credits on concentrates purchase from Manaus Free Trade Zone in Brazil, the depreciation of all of our operating currencies as applied to our U.S. dollar-denominated raw material costs, and restructuring severances of MXN 512 million during the quarter.
These restructuring severances are related to the implementation of an efficiency program that I will refer to in just a minute. Notably, our operating cash flow grew 5.2%, while our comparable operating cash flow increased 9.2% year-over-year. Consequently, our controlling net income increased by more than 25% for earnings per share of MXN 0.21, and an equivalent of MXN 1.66 for earnings of KOF UBL Unit. Normalizing our controlling net income by removing restructuring severances and normalizing our tax rate, our controlling net income would have increased