Vitro, S.A.B. de C.V. (BMV: VITROA)today announced its unaudited results for the third quarter of 2015 and nine-month period ended September 30, 2015.
On September 1, 2015, the sale of the Food and Beverage (F&B) Glass Containers division to Owens-Illinois, Inc. (NYSE: OI) was completed, cash and debt free, with proceeds to Vitro of US$2.15 billion. Of note, these operations had been accounted for as discontinued starting in 2Q’15 following the agreement to divest the F&B business.
Following divestiture of the F&B Glass Container division, the Company made some changes to the composition of its reportable segments structure. Prior to the divestiture, the Chemical business was grouped within the Glass Containers segment. Effective during the 3Q’15, the Chemical business became part of the Flat Glass segment as it more closely aligns with Vitro’s new structure. Selected financial information for the year 2014 and the first two quarters of 2015 has been reclassified in order to present comparable segment financial information accordingly with the new structure.
Commenting on Vitro’s performance and outlook, Mr. Adrián Sada Cueva, Chief Executive Officer, said: “This quarter marks a significant milestone for Vitro as we finalized the divestiture of our F&B Glass Container business and paid off our debt. As a result, Vitro is now a much stronger company – both operationally and financially. The Company’s solid operational base and financial flexibility, positions it well to capitalize on future growth opportunities that will further contribute to shareholder value.”
Mr. Sada further commented, “The macro environment remains challenging. Despite this, we delivered a strong financial performance this quarter, reporting double digit increases in both Consolidated Sales and EBITDA. EBITDA comparisons were slightly easier this year as last year’s results were negatively impacted since one of the float furnaces, representing about one-third of our capacity, was out of service for repair. Nevertheless, consistent EBITDA year over year improvement was achieved despite the negative impact from the 25.2 percent depreciation of the peso against the US dollar.”
“Our two key businesses performed well in the quarter. First, strong market dynamics in the domestic construction market as well as higher demand from OEMs were the main drivers behind the overall increase in sales. Second, the Glass Containers business strong demand from the pharmaceutical segment more than compensated weaker fragrances sales in the US and Brazil.”
“To capitalize on the attractive potential we see in the Mexican automotive and construction industries and to support the growth of our customers in these markets, we plan to invest US$85 million to expand our float glass production capacity in Mexico. This investment includes the construction of a new float glass furnace, and a capacity expansion at our Mexicali float glass furnace. These investments will allow us to strengthen our leading position in OEM market in NAFTA, particularly in Mexico.”
“We thank our employees for their commitment and hard work, and appreciate the continued confidence and support of our customers, suppliers and shareholders as we enter this new stage for Vitro, as a stronger and more focused company with attractive growth opportunities. On behalf of Vitro I want to express our commitment to continue taking the strategic measures that will contribute to further increase the value of the Company.”
Commenting on the balance sheet, Mr. Claudio Del Valle, Chief Administrative and Financial Officer, noted: “Demonstrating our commitment on maintaining a solid strong balance sheet and financial position, this quarter we completely paid off all of Vitro’s debt and accrued interest for a total of US$1,142 million through a portion of the proceeds from the sale of the F&B Glass Container business. Another benefit from paying off the debt has been to eliminate exposure to U.S. dollar denominated debt in a weaker peso environment. Furthermore, Vitro’s strong cash position provides the Company with the financial flexibility to maximize future growth opportunities. In October we are paying value added taxes of US$126 million from the divestiture of the F&B Glass Container business, which together with cash generated during the month is expected to bring our cash position to US$390 million as of October 31, 2015.”