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GCarso says earnings hit by new accounting method

MEXICO CITY, Feb 16 (Reuters) - Mexican retailer and industrial conglomerate Grupo Carso said on Monday it adopted new accounting principles that will reduce the value of its fixed assets and affect its balance sheet.

The company said in a statement its board decided to adopt prematurely for 2003 new accounting methods as recommended in a guideline published by the Mexican Institute of Public Accountants.

"The effects of adopting the principles established in the guideline will generate a reduction in the value of the company's fixed assets by approximately 567 million pesos, which net of taxes affected the balance sheet results by approximately 389 million pesos ($35.6 million)."

Analysts said the move was likely to hit Carso's fourth-quarter earnings, due to be released on February 26.

In the third quarter of 2003 Carso, part of the business empire of Latin America's richest man, Carlos Slim, said its net profit fell to 156 million pesos from 249 million pesos while revenues rose 5.9 percent to 13.866 billion pesos.

Carso's Condumex unit, which produces cables for the construction, car and telecoms industry, represents about a quarter of Carso sales.

It also has a retail division that includes Grupo Sanborns , which operates restaurants and stores.

($1=10.937 pesos)