Grupo Elektra Announces 36% EBITDA Growth to Ps.1,222 Million in 4Q09
-EBITDA margin increases three percentage points to 11% in the quarter-
-Noteworthy strengthening of asset quality; consolidated delinquency rate falls one percentage point to 8.7%-
-Solid expansion in consolidated deposits, 23% growth, to Ps. 56,608 million-
-Firm growth of active savings and deposit accounts, from 6.8 million to 8.7 million-
MEXICO CITY, Feb. 25 /PRNewswire-FirstCall/ -- Grupo Elektra, S.A. de C.V. (BMV: ELEKTRA*; Latibex: XEKT), Latin America's leading financial services company and specialty retailer, reported today its financial results for the fourth quarter of 2009 and for the full year.
"We achieved an increase in the consolidated revenue in the quarter -- as a result of solid commercial and financial business performance -- and at the same time we made important costs reductions, which stimulated EBITDA and the profitability of Grupo Elektra in a notable way," said Carlos Septien, Chief Executive Officer of Grupo Elektra and Banco Azteca.
"Increased business from our retailing operations is the result of our strategy to continuously offer products and services that best satisfy client needs in the most competitive way, which strengthens the preferences of thousands of families to shop at Elektra," added Mr. Septien. "As for the financial business, growth was accompanied by increasing strength of our assets. The consolidated delinquency rate fell a full percentage point to 8.7% in the period, which translates into a lower credit reserves requirement and a reduction in financial cost."
Consolidated Fourth Quarter Results
Consolidated revenue was Ps.11,476 million, compared to Ps.11,159 million for the same quarter last year. Costs and operating expenses were Ps.10,254 million, from Ps.10,258 million in the same period of the prior year.
Grupo Elektra reported EBITDA of Ps.1,222 million, 36% more than the
Ps.900 million of the fourth quarter of 2008. The EBITDA margin was 11% this
period, three percentage points above that of last year. The company
registered net income of Ps.3,690 million, compared to net income of Ps.6,732
million a year ago.
4Q 2008 4Q 2009 Change
Ps. %
Consolidated Revenue $11,159 $11,476 $317 3%
EBITDA $900 $1,222 $322 36%
Net Results $6,732 $3,690 $(3,042) -45%
Results per Share $27.61 $15.11 $(12.5) -45%
Figures in millions of pesos.
As of December 31, 2008, Elektra* outstanding shares were 243.8 million and the number of shares as of December 31, 2009, were 244.2 million.
Consolidated Revenue
The 3% increase in consolidated revenue was the result of a 3% increase in commercial revenue, as well as similar growth in financial income.
Costs and Expenses
Consolidated costs were Ps.6,177 million, 4% lower than Ps.6,466 million from a year ago.
Consolidated costs include financial cost -- which represents the creation of loan-loss reserves and interest paid to depositors on savings -- as well as commercial cost, which mainly represents the cost of the goods sold.
The costs reduction for this quarter was primarily the result of lower preventive credit reserves requirements, due to the strengthening of the consolidated portfolio quality.
Consolidated operating expenses were Ps.4,077 million, compared to Ps.3,792 million for the same period a year ago; the increase is primarily a result of higher operation expenses due to the financial and commercial business expansion in Central and South America. Despite the associated expenses, the expansion is anticipated to generate solid performance going forward.
EBITDA and Net Result
Consolidated EBITDA was Ps.1,222 million, 36% higher than the Ps.900 million reported a year ago; the EBITDA margin for the quarter was 11%, compared to 8% for the previous year.
The principal changes below EBITDA were i) a reduction of Ps.4,120 million in other financial income -- which reflects a 20% appreciation in the market value of underlying financial instruments that the company holds and doesn't imply cash flow in the quarter, compared to a 52% appreciation a year ago, ii) exchange loss of Ps.134 million compared with a profit of Ps.479 million a year ago, due to an appreciation of the peso this quarter.
The above changes were partially offset by i) an improvement of Ps.614 million in interest income as a result of the company investment appraisal for the quarter, and ii) a Ps.553 million reduction of other expenses, derived from a lower deterioration of property and other assets in the quarter.
Under the discontinued operations heading, a Ps.276 million charge was registered in the quarter compared to Ps.78 million of the prior year. This is a result of the suspension of automobile sales operations due to the difficult global automotive industry situation. As a consequence, the income, costs and expenses in Grupo Elektra's income statement excludes the automotive division of Grupo Elektra, and the net balance of these concepts is presented under discontinued operations.
Grupo Elektra reported net income of Ps.3,690 million, compared to a Ps.6,732 million profit a year ago.
The company anticipates that the recent income tax law changes, related to fiscal consolidation, will not have material effects on its income statement.
Cash and Cash Equivalents
As of December 31, 2009, total cash and cash equivalents were Ps.63,343 million, 40% higher than the Ps.45,307 million of the prior year, mainly due to higher investment levels of the financial business. At the end of the quarter, the cash and investments balance for the financial business was Ps.38,167 million, and for the commercial business was Ps.25,176 million.
Consolidated Loan Portfolio and Deposits
As of December 31, 2009, the gross consolidated portfolio for Banco Azteca Mexico and Banco Azteca and Elektrafin Latin America was Ps.24,384 million, compared to Ps.29,455 million for the prior year.
The past due loan portfolio was reduced 25% to Ps.2,119 million, from Ps.2,833 million of the previous year. The consolidated delinquency rate decreased from 9.6% to 8.7%
As of December 31, 2009, consolidated deposits were Ps.56,608 million, 23% higher than Ps.45,943 million a year ago.
Financial Business
Banco Azteca Mexico
During the fourth quarter, revenue from Banco Azteca Mexico was Ps.4,939 million, 4% higher than the Ps.4,756 million reported a year ago. The financial cost for the bank during the quarter was Ps.1,386 million, 27% less than the Ps.1,891 million reported the previous year, derived principally from a lower estimation of credit risk.
As of December 31, 2009, the capitalization index of Banco Azteca was 14.8%. The company considers the index to be at a level that optimizes equity profitability.
The gross portfolio was Ps.21,440 million, compared to Ps.25,357 million reported a year ago. The past due loan portfolio was Ps.1,776 million, and the delinquency rate was 8.3%.
At the end of the quarter, the bank had a total of 9.5 million active credit accounts; the large customer base is an additional strength of the bank that further reduces credit risk. The average term of the credit portfolio for principal credit lines -- consumer, personal loans and Tarjeta Azteca -- was 59 weeks at the end of the fourth quarter.
Deposits of Banco Azteca Mexico were Ps.50,131 million at the end of the quarter, 10% more than the Ps.45,441 million of the previous year. At the end of the period, the bank had a total of 8.7 million active savings and deposit accounts, a 27% increase from the 6.8 million accounts at the end of the same period a year ago.
Seguros Azteca
Grupo Elektra's insurance companies -- Seguros Azteca Vida and Seguros Azteca Danos -- reported additional revenue of Ps.338 million in the quarter, total assets of Ps.2,115 million as of December 31, 2009, and shareholders' equity of Ps.1,048 million, 49% higher than the Ps.704 million reported a year ago.
Afore Azteca
As of December 31, 2009, Siefore Azteca's assets under management were Ps.10,363 million. Total assets were Ps.293 million and shareholders' equity was Ps.269 million.
Commercial Business
Revenue from the commercial business in the quarter was Ps.5,743 million, 3% superior to the Ps.5,582 million reported a year ago.
As of December 31, 2009, total debt with cost of the commercial business was Ps.6,917 million, 12% less than Ps.7,846 million reported a year ago. The net cash of the commercial business -- excluding debt -- was a positive Ps.18,258 million, 36% higher compared to a positive balance of Ps.13,471 million as of December 31, 2008.
Of the total debt of the commercial business, 98% is denominated in pesos, in line with most of the earnings of the company, with a weighted average interest rate of 8%. The remaining 2% of the debt denominated in foreign currency is covered with operations on the asset side in the same currency, which minimizes foreign exchange risks.
Expansion
The company has a large distribution network, which allows closeness to customers, and provides a superior market position in Mexico and in Latin America. As of December 31, 2009, Grupo Elektra had 2,042 points of sales, compared to 2,024 a year ago. There are currently 1,600 points of sale in Mexico, as well as 442 in Central and South America.
Twelve Month Consolidated Results
Total consolidated revenue for 2009 was Ps.42,796 million, 2% higher than the Ps.41,979 million a year ago. The company reported EBITDA of Ps.5,636 million, 4% superior than Ps.5,395 million reported in the same period of 2008; the EBITDA margin of 2009 was 13%, unchanged from the prior year. Grupo Elektra registered net income of Ps.4,974 million, compared to Ps.9,377 million for 2008, as a result principally of lesser appreciation in the market value of the underlying financial instruments that the company holds -which doesn't imply cash flow- compared to the previous year.
2008 2009 Change
Ps. %
Consolidated Revenue $41,979 $42,796 $817 2%
EBITDA $5,395 $5,636 $241 4%
Net Results $9,377 $4,974 $(4,403) -47%
Results per Share $38.46 $20.37 $(18.09) -47%
Figures in millions of pesos.
As of December 31, 2008, Elektra* outstanding shares were 243.8 million and the number of shares as of December 31, 2009, was 244.2 million.
Company Profile:
Grupo Elektra (www.grupoelektra.com.mx) is Latin America's leading financial services company focused on the mass market. The Group operates close to 2,000 points of sale in Mexico, Brazil, Guatemala, Honduras, Peru, Panama, El Salvador and Argentina. Grupo Elektra also sells and markets its consumer finance, banking and financial products and services through Banco Azteca branches located in Mexico, Brazil, Panama, Guatemala, Honduras, Peru and El Salvador.
Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, contributing to build the middle class of the countries in which they operate and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com), Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. The companies include TV Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx) and Grupo Iusacell (www.iusacell.com.mx). Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, the member companies share a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.
Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Other risks that may affect Grupo Elektra and its subsidiaries are identified in documents sent to securities authorities.
Investor Relations
Bruno Rangel
Grupo Salinas
Tel. +52 (55) 1720 9167
[email protected]
Fernanda Gonzalez-Rul
Grupo Elektra S.A. de C.V.
Tel. +52 (55) 1720 1339
[email protected]
Press Relations
Tristan Canales
Grupo Salinas
Tel. +52 (55) 1720-1441
[email protected]
Daniel McCosh
Grupo Salinas
Tel. +52 (55) 1720-0059
[email protected]
SOURCE Grupo Elektra, S.A. de C.V.
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