The results of the main Mexican companies affected by the crisis in Nicaragua

MEXICO CITY/MANAGUA (Reuters) – Some of Mexico’s biggest companies operating in Nicaragua have been counting the costs of a political crisis engulfing the Central American country since violent protests against President Daniel Ortega erupted in April this year last.

The protests, in which more than 300 people died, have hit Nicaragua’s fragile economy hard. Gross domestic product shrank 3.8% in 2018 and the World Bank said in April that economists expected the crisis to worsen this year.

Three of Mexico’s largest companies – cement maker Cemex CEMEXCPO.MX, Coca-Cola bottler FEMSA and telecommunications company America Movil – said in their second-quarter earnings release that their operations in Nicaragua suffered. Mexico’s earnings season ended on Friday.

Cemex Latam Holdings CLH.CN said its business in Nicaragua was suffering from a slowdown in the construction sector, which shrank 21% in 2018, according to central bank data.

“The crisis remains unresolved and continues to affect economic activity, including cement demand,” subsidiary Cemex said in second-quarter results, without giving details.

Coca-Cola FEMSA KOFUBL.MX reports a decline in its local business since the first quarter.

“Nicaragua is still a challenging environment in which to operate,” Constantino Spas, the company’s chief financial officer, said in a conference call with analysts.

Nicaragua’s internal trade fell 11.4% in 2018, according to the central bank. Experts consulted by Reuters highlighted tourism, the retail sector and manufacturing as some of the hardest hit sectors of the economy.

“We are experiencing a crisis of confidence marked by consumer and investor uncertainty,” said Jose Adan Aguerri, president of Nicaragua’s main trade association, COSEP.

America Movil AMXL.MX announced a 7.1% drop in revenue from the provision of telecommunications services in Nicaragua in the second quarter. He also said he lost 406,000 mobile phone subscribers in the country during the period.

Of course, not all companies have been affected.

Wal-Mart of Mexico WALMEX.MXa subsidiary of U.S. retailer Wal-Mart Inc., said sales in Nicaragua helped boost its revenue in Central America in the quarter.

Mexican dairy company Grupo Lala LALAB.MX reported that improved sales in Nicaragua and Guatemala helped its quarterly sales for Central America rise 4.4% in dollar terms to 710 million pesos ($37.24 million).

“This is the first quarter (since) the crisis in Nicaragua that shows the first signs of a recovery in revenue and net income,” said Lala vice president of finance, Alberto Arellano, during a call for results.

Reporting by Noe Torres and Ismael Lopez; written by Stefanie Eschenbacher; Editing by Sonya Hepinstall