Alfa SAB de CV : Nemak continues to post strong results; Sigma completes tender offer for Campofrio
July 14, 2014 at 05:58 pm EDT
Share
Julio 14, 2014
Nemak continues to post strong results; Sigma completes tender offer for Campofrio
Monterrey, N.L., Mexico. July 14, 2014.- ALFA, S.A.B de C.V. ("ALFA") announced today unaudited financial results for the quarter ended June 30, 2014 ("2Q14"). Revenues were slightly lower year-on-year, while EBITDA1 increased 1%, reaching U.S. $4,024 million and U.S. $510 million, respectively.
Explaining 2Q14 results, Mr. Alvaro Fernandez, ALFA's President, said "Nemak reported record EBITDA results, benefitting from robust sales in North America and a recovery in Europe. Sigma, Alestra and Newpek performed satisfactorily. In turn, Alpek posted a mild improvement, supported by stable feedstock prices and the beginning of the seasonally stronger summer period."
2Q14 Capital Expenditures and acquisitions amounted to U.S. $408 million. This figure includes U.S. $163 million corresponding to the acquisition of the majority of Campofrio shares that traded in the market purchased through a tender offer completed by Sigma in the quarter. As a result, Sigma and WH Group now own approximately 98.6% of Campofrio's equity.
ALFA's financial condition remained strong. As of June 30, 2014, Net Debt totaled U.S. $4,259 million, U.S. $1,257 million higher than 2Q13. The increase is primarily attributable to the acquisition of Campofrio, as Sigma raised roughly U.S. $600 million to fund the Campofrio acquisition, and also assumed U.S. $662 million of Campofrio's own debt as of March 31, 2014. Financial ratios at the end of 2Q14 were: Net Debt to EBITDA of 2.2 times, and Interest Coverage of 6.1 times. These figures compare with 1.6 and 6.6 times in 2Q13, respectively. The 2Q14 ratios reflect the increase in debt already explained, without the offsetting benefit to EBITDA from the Campofrio acquisition as this was closed late in the quarter.
Majority Net Income totaled U.S. $147 million in 2Q14, much higher than U.S. $8 million in 2Q13. The improved performance was primarily due to the fact that the 2Q13 results were negatively impacted by a provision for the closure of Alpek's Cape Fear plant. Exchange gains due to more favorable currency exchange rates in 2Q14 also contributed to the increase in Majority Net Income.
Selected Financial Information
(U.S. $ Millions)
Ch.%
Ch.%
2Q14
2Q13
1Q14
vs. 1Q14
vs. 2Q13
YTD '14
YTD '13
YTD
% Chg.
Consolidated Revenues
4,024
4,074
3,895
3
(1)
7,919
7,981
(1)
Alpek
1,615
1,811
1,576
2
(11)
3,191
3,637
(12)
Nemak
1,202
1,137
1,205
0
6
2,406
2,189
10
Sigma
1,037
973
952
9
7
1,989
1,857
7
Alestra
103
98
99
4
5
202
194
4
Newpek
42
32
39
8
30
81
62
30
Consolidated EBITDA
510
507
459
11
1
968
985
(2)
Alpek
126
122
105
19
3
231
282
(18)
Nemak
193
173
188
3
12
381
315
21
Sigma
135
147
117
15
(8)
252
262
(4)
Alestra
41
56
39
7
(27)
80
93
(14)
Newpek
30
24
26
17
25
56
45
25
Majority Net Income
147
8
128
15
-
276
214
29
Capex & Acquisitions
408
375
236
9
73
644
577
12
Net Debt
4,259
3,302
3,578
19
42
4,259
3,002
42
Net Debt to LTM EBITDA*
2.2
1.6
1.9
Interest Coverage*
6.1
6.6
6.4
* Times. LTM= Last 12 months.
1 EBITDA = operating income + depreciation and amortization + non-recurring items.
Alfa SAB de CV is a Mexico-based holding company, which manages a portfolio of diversified subsidiaries. Its portfolio includes Sigma, a producer, marketer and distributor of foods under a number of brands in Mexico, the United States, Europe and Latin America; Alpek, a producer of polyester, namely purified terephthalic acid (PTA), polyethylene terephthalate (PET) and fibers, and offers to the Mexican market expandable polystyrene (EPS) and caprolactam, among others; Nemak, a provider of lightweighting solutions for automotive industry and specialized in the development and manufacturing of aluminum components for powertrain and body structure; Axtel, a provider of information technology and communication services for enterprises, government and residential markets through its Alestra and Axtel brands, and Newpek, which is an oil and gas exploration and production company with operations in Mexico and the United States.
ALFA S.A.B. DE C.V. 
