25 February 1999: Groupo Vitro, the Mexican glass conglomerate, ended the fourth quarter on a weak note, analysts said, with earnings and cash flow squeezed by cheaper Asian glassware imports and a mo…
25 February 1999: Groupo Vitro, the Mexican glass conglomerate, ended the fourth quarter on a weak note, analysts said, with earnings and cash flow squeezed by cheaper Asian glassware imports and a move from bottle glass to plastic. Mexico“s largest glass producer announced a 1.8% rise in sales to Pso 6.4 billion (US$ 645 million). Vitro blamed the weak showing in its household appliance division on high interest rates in Mexico, but analysts noted appliance exports were down on the fourth quarter of 1997. Glassware sales were down 4%, largely due to Asia while the group“s container division saw only limited growth owing to a slowdown in the Mexican economy and a trend towards greater use of plastic for bottling. Vitro“s operating income increased 7.9% to Pso 1.05 billion for the quarter on strong exports and lower costs. Flat glass sales were up 6.8%. Other strong showings were in non-core businesses such as chemical products, with sales up 12.5% year on year. Last year, the group reduced its debt by US$ 54 million, bringing its net debt to equity ratio down to 38%. Meanwhile, Vitro plans to invest between US$ 200 million and US$ 220 million this year, slightly less than the US$ 231 million invested in 1998, finance director Hugo Jaime Garcia said. “The investment plans are for between US$ 200-US$ 220 million, practically unchanged from 1998,” Garcia said. He said the investment would be funded through cash flow and the firm saw no pressing need to borrow. But it would keep an eye on debt markets to best exploit opportunities. The executive said the company had no particular projects planned but intended to spread the investment around, increasing capacity for export or updating technology.