Grupo Casa Saba 2Q04 Earnings Release

Grupo Casa Saba 2Q04 Earnings Release
EBITDA and Net Income Increase 2.1% and 30.6%, Respectively













MEXICO CITY, July 27  /PRNewswire-FirstCall/ -- Grupo Casa Saba ("Saba," GCS,
the company or the Group), Grupo Casa Saba, one of the leading Mexican
distributors of pharmaceutical products, health, beauty, personal care and
consumer goods, general merchandise and publications, announces its
consolidated financial and operating results for 2Q04.

During the second quarter of the year, Grupo Casa Saba presented positive
results versus the same period of 2003, both, at the operative and the
financial level. This was due to the administrative and financial discipline
through which we have been operating, as well as to the positioning in the
market that sustains the Group in the different segments in which it
participates.

By division, the distribution of pharmaceutical products to the private market
continued registering growth in sales. This was due to the positive performance
that the Private Pharma market in Mexico has been registering as well as to the
presence that sustains our sales force throughout Mexico.

"Citem," our Publications division, also registered positive figures, as a
result of its current publications catalogue that includes leading titles, as
well as a more efficient operative structure.

The division of distribution of pharmaceutical products to the government
sector registered an important growth in sales, due to higher sales to
governmental institutions different than Petroleos Mexicanos (PEMEX).

On the operating side, we continued with our discipline of controlling
expenses, which, together with our strategies of increasing productivity,
allowed us to reduce our expenses in relation to sales.

Financially, we are pleased to comment that, by the end of the second quarter
of the current year, the Group's cost bearing liabilities decreased 47.18%, to
$250.0 million. In net terms, with respect to cash and temporary investments,
cost bearing liabilities registered a negative balance of $80.67 million, which
reflects the solid financial base upon which Grupo Casa Saba operates
up-to-date.

In the second quarter of the present year, Grupo Casa Saba's consolidated net
profit increased 30.6%, reaching $101.32 million. The increase reflects the
improved operative results as well as a lower Comprehensive Financing Cost, an
increase in other income and a lower tax provision than the one registered in
2Q03.

As a result of the financial position that the Group maintains, and the
obtained operative results, last April at the Annual Shareholders meeting, a
payment of a cash dividend in the amount of $110.0 million was approved, being
10% higher   than the one approved it approved in 2003. This dividend was paid
on July 5th and is a reflection of our commitment to generate value for our
shareholders.

  SALES BY DIVISION
  PRIVATE PHARMA


As a result of the positive performance of the pharmaceutical market in Mexico,
sales in our main division, Private Pharma, registered during the quarter a
growth of 3.56%. As a percentage of total sales, Private Pharma went from
82.76% in 2Q03 to 83.70% in 2Q04.

GOVERNMENT PHARMA

After several quarters of negative comparisons, Government Pharma grew 9.83%
during the quarter. This is mainly attributed to an increase in sales to
governmental institutions different than Petroleos Mexicanos (PEMEX), the
Mexican National Oil Company. As a percentage of total sales, the Group's
Government Pharma division increased its participation from 2.52% in 2Q03 to
2.70% in 2Q04.

HEALTH, BEAUTY, CONSUMER GOODS AND GENERAL MERCHANDISE

The Group's division oriented to the distribution of health, beauty, consumer
goods and general merchandises products, registered a reduction during the
quarter of 8.92%. This was mainly due to a decrease in sales of health, beauty
and consumer goods to some of our clients, who decided not to acquire these
product lines from Grupo Casa Saba. As a result, the sales of our division
health, beauty, consumer goods and general merchandises as a percentage of
total, went from 11.32% in 2Q03 to 10.06% in 2Q04.

PUBLICATIONS

Citem, our division dedicated to the distribution of publications, registered
in the second quarter of the present year a growth of 6.47%. This positive
performance is due to Citem's current product catalogue, which includes market
leading titles. Its more efficient structure through which is now operating,
also contributed to the increase in sales. As a percentage of total sales,
Citem represented in 2Q04 3.54%.

  Division                                                     % Of Sales
  Private Pharma                                                   83.70%
  Government Pharma                                                 2.70%
  Health, beauty, Consumer Goods and General Merchandise           10.06%
  Publications                                                      3.54%
  Total                                                           100.00%

  QUARTERLY RESULTS
  GROSS PROFIT


During the second quarter of 2004 gross profit grew 0.82%.  As a result, the
group's gross margin decreased 15 basis points to 9.31% with respect to the
second quarter of 2003. This figure reflects the increase in competitiveness
that the private pharmaceutical product distribution has registered, as well as
the higher weight that our special clients (chains of pharmacies and
supermarkets) have within our sales mix.

OPERATING EXPENSES

The Group's consolidated operative expenses increased during the second quarter
of the year by 0.30% or $0.92 million. Consequently, the expense ratio
decreased 13 basis points to 6.36% with respect to 2Q03.

OPERATING INCOME

Operating income for the second quarter of the year reflected a growth of
1.94%, with respect to the same period of 2003. Consequently, the Group's
consolidated operating margin went from 2.96% in 2Q03 to 2.95% in 2Q04.

OPERATING PROFIT PLUS DEPRECIATION AND AMORTIZATION (EBITDA)

EBITDA for 2Q03 increased 2.10% compared to 2Q03, and was influenced by the
3.04% growth in depreciation and amortization, which reached $24.04 million
during the quarter.

COST-BEARING LIABILITIES AND CASH

Cost-bearing liabilities for June 2004 were $250.0 million, equivalent to a
decrease of 47.18% with respect to the same period of 2003. Cash and temporary
investments increased 18.64% as compared to 2Q03. Therefore, cost-bearing
liabilities less cash and temporary investments registered a negative balance
of $80.67 million.

COMPREHENSIVE FINANCING COST

Mainly as a result of the lower level of indebtedness, the CFC for 2Q04
decreased 65.73% compared to 2Q03. The before mentioned is result of interest
expenses 48.73% lower than in 2Q03, as well as higher interest income and
slight income via interest gained and monetary position.

OTHER EXPENSES/ INCOME

Other income registered an increase of 19.11% during the quarter. This was
mainly due to the sale of assets as well as services rendered by Grupo Casa
Saba to third parties.

TAX PROVISIONS

The tax provisions for ISR, IMPAC, ISR deferred and PTU, resulted in a
quarterly decline of 15.23%. This decrease was primarily due to a lower
deferred taxes.

NET INCOME

As a result of the slight improvement in operating results, the lower CFC, the
higher other income and the lower tax provision, net income for the second
quarter of the year reached $101.32 million, an increase of 30.60% versus 2Q03.

WORKING CAPITAL

Accounts receivable days for the quarter were 57.2 days, an increase of 1.5
days with respect to June 2003. In terms of inventory days and as a result of
the sales levels that were obtained during the period, inventory days at cost,
increased 8.3 days, as compared to the 37.5 days registered in 2Q03. Supplier
days registered an increase of 1.9 days versus 2Q03.

The 265.4 million shares issues by Grupo Casa Saba are listed on the Mexican

Stock Exchange and in the form of ADRs on the New York Stock Exchange, both

under the ticker symbol "SAB."  One ADR is equivalent to 10 common shares.

Grupo Casa Saba is one of the leading distributors in Mexico of pharmaceutical

products, beauty, personal care and consumer goods, general merchandise and
publications.  With more than 110 years of experience, the Company distributes
to the majority of pharmacies, chains, self-service and convenience stores, as

                well as other specialized national chains.

As a precautionary note to investors, except for the historic information
  contained herein, certain themes discussed in this document constitute


forward-looking statements.  Said themes have risks and uncertainties,
including the economic conditions in Mexico and other countries in which Casa

Saba operates, as well as variations in the value of the Mexican peso as

compared with the US dollar. 

DATASOURCE: Grupo Casa Saba



CONTACT:  Jorge Sanchez, IRO, [phone], , or

Alejandro Sadurni, CFO, , both of Grupo Casa Saba; IR

Communications - Ernestina Nevarez, [phone], ,

for Grupo Casa Saba



Web site:  http://www.casasaba.com/ 

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