Orbia Announces Second Quarter 2024 Financial Results
Orbia delivered revenues and EBITDA of
Q2 2024 Financial Highlights
(All metrics are compared to Q2 2023 unless otherwise noted)
-
Net revenues of
$2.0 billion decreased 9%, driven by lower sales in Connectivity Solutions, Building & Infrastructure and Fluor & Energy Materials. -
EBITDA of
$334 million decreased 25%, primarily driven by Connectivity Solutions and Fluor & Energy Materials. -
Operating Cash Flow of
$4 million decreased by$212 million driven by lower EBITDA and a use of cash for working capital.
“Our second quarter results delivered significant sequential improvement across all business groups, highlighting Orbia’s resilience despite ongoing market challenges in certain regions. Based on recent market dynamics, we maintain cautious optimism for continued improvement in business conditions during the remainder of the year. We remain focused on cash generation, supported by commercial and financial discipline while also driving operational efficiencies. These efforts position us favorably for future growth. We are confident we will deliver on our long-term strategic growth projects and will fulfill our commitment to generate sustainable shareholder value.” said
Q2 2024 Consolidated Financial Information1 (All metrics are compared to Q2 2023 unless otherwise noted) |
||||||
mm US$ | Second Quarter | |||||
2024 |
|
2023 |
|
% Var |
||
Net sales |
1,976 |
|
2,177 |
|
-9% |
|
Cost of sales |
1,474 |
|
1,541 |
|
-4% |
|
Selling, general and administrative expenses |
329 |
|
342 |
|
-4% |
|
Operating income |
173 |
|
297 |
|
-42% |
|
EBITDA |
334 |
|
444 |
|
-25% |
|
EBITDA margin |
16.9% |
|
20.4% |
|
-352 bps |
|
Financial cost |
35 |
|
132 |
|
-73% |
|
Earnings before taxes |
139 |
|
161 |
|
-13% |
|
Income tax |
(85) |
|
129 |
|
N/A |
|
Consolidated net income |
224 |
|
32 |
|
611% |
|
Net majority income |
195 |
|
8 |
|
2309% |
|
Operating cash inflow (outflow) |
4 |
|
217 |
|
-98% |
|
Capital expenditures |
(107) |
|
(162) |
|
-34% |
|
Free cash inflow (outflow) |
(130) |
|
30 |
|
N/A |
|
Net debt |
3,838 |
|
3,430 |
|
12% |
__________________ |
1 Unless noted otherwise, all figures in this release are derived from the Consolidated Financial Statements of the Company as of |
Net revenues of
The decrease in revenues for the quarter was driven by an unfavorable mix and lower pricing in Connectivity Solutions, lower resin prices which translate into lower selling prices in Building & Infrastructure and lower volume of higher value refrigerants in Fluor & Energy Materials. These factors offset volumes increases year over year in all businesses except Connectivity Solutions.
Cost of goods sold of
Selling, general and administrative expenses of
Year to date, the Company has reduced manufacturing and SG&A costs by
EBITDA of $334 million decreased 25%, while EBITDA margin contracted 352 basis points to 16.9%.
The decrease in EBITDA and EBITDA margin was due to lower revenues and an unfavorable product mix in Connectivity Solutions and Fluor & Energy Materials compared to the previous year.
Financial costs of
An Income Tax Benefit of
Net income to majority shareholders of
Operating cash flow of
The decreases in operating cash flow and free cash flow were driven by lower EBITDA and investment in working capital.
Net debt of
Q2 Revenues by Region (All metrics are compared to Q2 2023 unless otherwise noted) |
||||||||
mm US$ | Second Quarter | |||||||
Region |
2024 |
|
2023 |
|
% Var |
|
% Revenue |
|
|
728 |
|
858 |
|
-15% |
|
37% |
|
|
582 |
|
673 |
|
-14% |
|
29% |
|
|
387 |
|
390 |
|
-1% |
|
20% |
|
|
217 |
|
196 |
|
11% |
|
11% |
|
|
62 |
|
60 |
|
2% |
|
3% |
|
Total |
1,976 |
|
2,177 |
|
-9% |
|
100% |
Q2 Financial Performance by
(All metrics are compared to Q2 2023 unless otherwise noted)
Polymer Solutions (
Orbia’s Polymer Solutions business group (commercial brands Vestolit and Alphagary) focus on general purpose and specialty PVC resins (polyvinyl chloride), PVC and zero-halogen specialty compounds with a wide variety of applications in everyday products for everyday life, from pipes and cables to household appliances and medical devices. The business group supplies Orbia’s downstream businesses and a global customer base.
mm US$ | Second Quarter | |||||
Polymer Solutions |
2024 |
|
2023 |
|
% Var |
|
Total sales* |
644 |
|
645 |
|
0% |
|
Operating income |
39 |
|
38 |
|
2% |
|
EBITDA |
107 |
|
102 |
|
4% |
|
*Intercompany sales were |
Revenues of
Revenue was flat year-over-year, driven by higher volumes, which were offset by lower prices across the product portfolio, especially in derivatives. Volumes increased despite the temporary shutdown at the Company’s
EBITDA increased year-over-year driven by lower raw material costs and growth in the
Building & Infrastructure (Wavin), 32% of Revenues
Orbia’s Building & Infrastructure business group (commercial brand Wavin) is redefining today’s pipes and fittings industry by creating solutions that last longer and perform better, all with less installation labor required. The business group benefits from supply chain integration with the Polymer Solutions business group, a customer base spanning three continents, and investments in sustainable, resilient technologies for water and indoor climate management.
mm US$ | Second Quarter | |||||
Building & Infrastructure |
2024 |
|
2023 |
|
% Var |
|
Total sales |
665 |
|
698 |
|
-5% |
|
Operating income |
42 |
|
42 |
|
0% |
|
EBITDA |
78 |
|
74 |
|
4% |
Revenues of
The decrease in revenues was primarily driven by continued weak volume activity in certain parts of
EBITDA and EBITDA margin increased driven by operational costs optimization, which was partially offset by an unfavorable product mix.
Precision Agriculture (
Orbia’s Precision Agriculture business group’s (commercial brand
mm US$ | Second Quarter | |||||
Precision Agriculture |
2024 |
|
2023 |
|
% Var |
|
Total sales |
284 |
|
288 |
|
-2% |
|
Operating income |
13 |
|
15 |
|
-15% |
|
EBITDA |
39 |
|
41 |
|
-3% |
Revenues of
Revenues were lower due to soft activity levels in
EBITDA declined because of lower revenues partly offset by cost saving efforts.
Connectivity Solutions (Dura-Line), 12% of Revenues
Orbia’s Connectivity Solutions business group (commercial brand Dura-Line) produces more than 500 million meters of essential and innovative connectivity infrastructure per year to bring a world’s worth of information everywhere. The business group produces telecommunications conduit, cable-in-conduit and other HDPE products and solutions that create physical pathways for fiber and other network technologies connecting cities, homes and people.
mm US$ | Second Quarter | |||||
Connectivity Solutions |
2024 |
|
2023 |
|
% Var |
|
Total sales |
236 |
|
338 |
|
-30% |
|
Operating income |
29 |
|
100 |
|
-71% |
|
EBITDA |
41 |
|
109 |
|
-63% |
Revenues of
Revenues declined due to lower volumes, an unfavorable mix of products sold, and weaker prices compared to the high levels achieved during last year. The decrease in volumes was caused by a combination of the ongoing high interest rate environment as well as customers reducing excess levels of inventory in the supply chain.
EBITDA decreased due to lower revenues and less absorption of fixed costs. This was partly offset by lower input costs and the continued benefits of cost management measures.
Fluor & Energy Materials (
Orbia’s newly renamed Fluor & Energy Materials business group (commercial brand
mm US$ | Second Quarter | |||||
Fluor & Energy Materials |
2024 |
|
2023 |
|
% Var |
|
Total sales |
230 |
|
263 |
|
-13% |
|
Operating income |
64 |
|
102 |
|
-37% |
|
EBITDA |
81 |
|
116 |
|
-30% |
Revenues of
Revenues for the quarter decreased year-over-year driven primarily by lower refrigerant volumes due to a quota phase-down in the
EBITDA decreased compared to last year due to the lower volumes of refrigerant gases, which were partially offset by cost control measures.
Balance Sheet, Liquidity and Capital Allocation
Orbia’s net debt-to-EBITDA ratio increased from 2.96x to 3.39x from previous quarter due to a reduction in the cumulative trailing 12-month EBITDA. At the end of the second quarter the Company had cash on hand of approximately
During the quarter Orbia increased debt by approximately
Working capital increased by
During the quarter, Orbia returned
2024 Outlook
The Company remains cautious about an economic recovery later this year as some headwinds persist. Interest rates are staying high for longer delaying demand recovery, despite strong long-term fundamentals. Additionally, government infrastructure fund deployment has been slower than anticipated. Considering these factors and building upon the Company's positive sequential momentum, the current full-year 2024 EBITDA guidance is approximately
The Company remains committed to commercial excellence, fiscal responsibility, operational efficiency, and continuous business optimization, strengthening its position to benefit as market conditions improve.
__________________ |
2 Excluding the impact of inflation and foreign exchange rate changes in |
Conference Call Details
Orbia will host a conference call to discuss Q2 results on
Participants may pre-register for the conference call here.
The live webcast can be accessed here.
A recording of the webcast will be posted several hours after the call is completed on Orbia’s website.
For all company news, please visit www.orbia.com/this-is-orbia/newsroom.
Consolidated Income Statement |
|||||||||||||
mm US$ | Second Quarter | January - June | |||||||||||
2024 |
|
2023 |
|
% |
|
|
2024 |
|
2023 |
|
% |
||
Net sales |
1,976 |
|
2,177 |
|
-9% |
|
|
3,839 |
|
4,457 |
|
-14% |
|
Cost of sales |
1,474 |
|
1,541 |
|
-4% |
|
|
2,905 |
|
3,162 |
|
-8% |
|
Gross profit |
502 |
|
635 |
|
-21% |
|
|
934 |
|
1,295 |
|
-28% |
|
Selling, general and administrative expenses |
329 |
|
342 |
|
-4% |
|
|
655 |
|
678 |
|
-3% |
|
Operating income |
173 |
|
297 |
|
-42% |
|
|
279 |
|
621 |
|
-55% |
|
Financial cost |
35 |
|
132 |
|
-73% |
|
|
174 |
|
233 |
|
-26% |
|
Equity income from associated entities |
1 |
|
(0) |
|
N/A |
|
|
2 |
|
0 |
|
1521% |
|
Impairment expense |
- |
|
4 |
|
N/A |
|
|
- |
|
4 |
|
N/A |
|
Income from continuing operations before income tax |
139 |
|
161 |
|
-13% |
|
|
107 |
|
384 |
|
-72% |
|
Income tax |
(85) |
|
129 |
|
N/A |
|
|
(70) |
|
272 |
|
N/A |
|
Consolidated net income |
224 |
|
32 |
|
611% |
|
|
177 |
|
112 |
|
58% |
|
Minority stockholders |
29 |
|
23 |
|
23% |
|
|
56 |
|
49 |
|
14% |
|
Majority Net income |
195 |
|
8 |
|
2309% |
|
|
121 |
|
63 |
|
92% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
EBITDA |
334 |
|
444 |
|
-25% |
|
|
587 |
|
913 |
|
-36% |
Consolidated Balance Sheet |
||||||
mm US$ | ||||||
|
|
|
||||
Total assets |
11,214 |
11,552 |
11,707 |
|||
Current assets |
3,800 |
4,170 |
4,499 |
|||
Cash and temporary investments |
797 |
1,456 |
1,283 |
|||
Receivables |
1,733 |
1,461 |
1,470 |
|||
Inventories |
1,186 |
1,200 |
1,238 |
|||
Others current assets |
84 |
53 |
508 |
|||
Non current assets |
7,414 |
7,382 |
7,208 |
|||
Property, plant and equipment, net |
3,316 |
3,370 |
3,261 |
|||
Right of use fixed assets, net |
476 |
469 |
361 |
|||
Intangible assets and goodwill |
3,069 |
3,148 |
3,130 |
|||
Long-term assets |
553 |
395 |
456 |
|||
Total liabilities |
8,156 |
8,334 |
8,476 |
|||
Current liabilities |
2,515 |
2,537 |
3,305 |
|||
Current portion of long-term debt |
317 |
466 |
890 |
|||
Suppliers |
1,191 |
1,228 |
1,273 |
|||
Short-term leasings |
118 |
106 |
94 |
|||
Other current liabilities |
889 |
737 |
1,047 |
|||
Non current liabilities |
5,641 |
5,797 |
5,171 |
|||
Long-term debt |
4,318 |
4,420 |
3,823 |
|||
Long-term employee benefits |
134 |
139 |
137 |
|||
Long-term deferred tax liabilities |
335 |
359 |
372 |
|||
Long-term leasings |
376 |
383 |
276 |
|||
Other long-term liabilities |
478 |
496 |
563 |
|||
Consolidated shareholders'equity |
3,058 |
3,218 |
3,231 |
|||
Minority shareholders' equity |
601 |
604 |
637 |
|||
Majority shareholders' equity |
2,457 |
2,614 |
2,594 |
|||
Total liabilities & shareholders' equity |
11,214 |
11,552 |
11,707 |
Cash Flow Statement |
|||||||||||||
mm US$ | Second Quarter | January - June | |||||||||||
2024 |
2023 |
% Var |
|
2024 |
2023 |
% Var |
|||||||
EBITDA |
334 |
444 |
-25% |
|
587 |
913 |
-36% |
||||||
Taxes paid, net |
(48) |
(160) |
-70% |
|
(94) |
(224) |
-58% |
||||||
Net interest / bank commissions |
(92) |
(72) |
27% |
|
(156) |
(146) |
7% |
||||||
Change in trade working capital |
(56) |
41 |
N/A |
|
(249) |
(140) |
77% |
||||||
Others (other assets - provisions, Net) |
(98) |
(55) |
78% |
|
(89) |
(74) |
21% |
||||||
CTA and FX |
(36) |
18 |
N/A |
|
(45) |
54 |
N/A |
||||||
Operating cash inflow (outflow) |
4 |
217 |
-98% |
|
(46) |
383 |
N/A |
||||||
Capital expenditures |
(107) |
(162) |
-34% |
|
(239) |
(304) |
-21% |
||||||
Leasing payments |
(27) |
(24) |
11% |
|
(46) |
(48) |
-4% |
||||||
Free cash inflow (outflow) |
(130) |
30 |
N/A |
|
(331) |
31 |
N/A |
||||||
Dividends to shareholders |
(80) |
(120) |
-33% |
|
(80) |
(120) |
-33% |
||||||
Buy-back shares program |
- |
6 |
N/A |
|
- |
8 |
N/A |
||||||
Debt |
26 |
29 |
-11% |
|
(147) |
(99) |
49% |
||||||
Minority interest payments |
(32) |
(32) |
0% |
|
(59) |
(63) |
-7% |
||||||
Mergers & acquisitions |
(0) |
(8) |
-97% |
|
(0) |
(8) |
-97% |
||||||
Financial instruments and others |
(37) |
(7) |
413% |
|
(42) |
(14) |
205% |
||||||
Net change in cash |
(253) |
(101) |
151% |
|
(659) |
(264) |
150% |
||||||
Initial cash balance |
1,050 |
1,384 |
-24% |
|
1,456 |
1,546 |
-6% |
||||||
Cash balance |
797 |
1,283 |
-38% |
|
797 |
1,283 |
-38% |
Notes and Definitions
The results contained in this release have been prepared in accordance with International Financial Reporting Standards (“NIIF” or “IFRS”) with
Figures and percentages have been rounded and may not add up.
About Orbia
Prospective Information
In addition to historical information, this press release contains "forward-looking" statements that reflect management's expectations for the future. The words “anticipate,” “believe,” “expect,” “hope,” “have the intention of,” “might,” “plan,” “should” and similar expressions generally indicate comments on expectations. The forward-looking statements included in this press release are subject to a number of material risks and uncertainties, and our results may be materially different from current expectations due to factors, which include, but are not limited to, global and local changes in politics, economic factors, business, competition, market and regulatory factors, cyclical trends in relevant sectors as well as other factors affecting our operations, markets, products, services and prices that are highlighted under the title “Risk Factors” in the annual report submitted by Orbia to the
Orbia has implemented a Code of Ethics that helps define our obligations to and relationships with our employees, clients, suppliers, and others. Orbia’s Code of Ethics is available for consultation at the following link: http://www.Orbia.com/Codigo_de_etica.html. Additionally, according to the terms contained in the Mexican Securities Exchange Act No 42, the Orbia Audit Committee has established a “hotline” system permitting any person who is aware of a failure to adhere to applicable operational and accounting records guidelines, internal controls or the Code of Ethics, whether by the Company itself or any of its controlled subsidiaries, to file a complaint (including anonymously). This system is operated by an independent third-party service provider. The system may be accessed via telephone in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240724983065/en/
Investors
+1 858-283-6201
investors@orbia.com
Media
+1 865-410-3001
kacy.karlen@orbia.com
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