Vitro S.A. de C.V. one of the world“s largest producers and distributors of glass products, announced on26 October 2004 unaudited results for the 3Q 2004. Vitro posted a 0.9% year-on-year increase in…
Vitro S.A. de C.V. one of the world“s largest producers and distributors of glass products, announced on26 October 2004 unaudited results for the 3Q 2004. Vitro posted a 0.9% year-on-year increase in consolidated sales. However excluding Envases Cuautitln and Vitro Fibras, divested in September 2003 and March 2004 respectively, sales gained 3.7%. Consolidated EBITDA fell year-on-year by 7.9%. Strong performance at Glass Containers partially offset the decline in Flat Glass and Glassware. On a comparable basis, however, consolidated EBITDA declined by only 3% with decreases at both the Flat Glass and Glassware business units. Consolidated EBITDA margins declined by 150 basis points and EBIT margins fell by 220 basis points. Alvaro Rodrguez, Chief Financial Officer, commented: “On a comparable basis, all units reported increased sales on the back of volume growth. Flat Glass was up 3%, Glass Containers up 5.1% and Glassware gained 3.7%. Once again this quarter, the Glass Containers unit provided strong growth in both sales and EBITDA.” “While Flat Glass was not as strong as expected, it“s important to note that this unit has stabilized. Quarter over quarter we see an improving trend in both sales and EBITDA. Volumes have continued to increase as well. Vitro has been able to successfully navigate an adjustment period absorbing the impact of price volatility over the last few quarters particularly in the Mexican market. At the same time we have gained market share.” Mr. Rodrguez continued, “Streamlining Vitro“s capital structure continues to be our primary focus. In addition to paying down debt, we are increasing the company“s financial flexibility to ultimately reduce risk and improve our cost of capital. This is a significant leg in our strategy. In the last 12 months we have successfully tapped the international and domestic capital markets raising a total of USD 750 million in long-term funds using both public and private sources. On 24 September 2004 we obtained a USD 230 million senior secured loan at Vitro Envases Norteamerica (VENA). Proceeds from this two-year maturity loan were used to refinance existing inter-company indebtedness between VENA and Vitro Holdco. This is part of our plan to reallocate debt from the holding company to the operating units. Before that, on 23 July 2004 VENA placed a USD 170 million senior secured guaranteed note, due July 2011. Proceeds were used to repay existing third party indebtedness.” “In addition, the divestiture of Vancan to our partner Rexam on 27 September 2004”, Mr. Rodrguez continued, “represented, to a large extent, the final leg in our strategy to become a pure glass company. We received net proceeds of USD 22.5 million from the sale, which are being used to pay down holding company debt.” Mr. Rodrguez concluded, “Vitro today is a very different company. We are making progress on the priorities we set for ourselves: the first was to become a pure glass company, which we have achieved. We also continue to make progress on streamlining our financial structure. This will allow us to obtain the flexibility required to further strengthen our operations, improve cash flow and reduce cost of capital. Vitro continues to build on its strengths as a leading glass company, with a balanced portfolio of assets, geographical diversification, value added niche products, and leading-edge technology.”