Vitro has announced its results for the fourth quarter of 2017
In reporting its fourth-quarter results, Vitro also announced an increase in sales of 41.5% year-over-year.
Vitro, S.A.B. de C.V., a leading glass producer in North America, has announced its results for the fourth quarter of 2017.
Vitro announced solid results for the fourth quarter of 2017 reflecting the recent acquisition in Flat Glass, of Vitro Automotive (formerly PGW´s Original Equipment unit OEM), with good performance of the Construction and Automotive segments on the Flat Glass division in Mexico.
Consolidated Net Sales rose 41.5% year-over-year during the fourth quarter of 2017 to USD 527 million. This was mainly driven by the 49.5% YoY increase in revenues in the Flat Glass division to USD 472 million for the quarter, notwithstanding the outage of two of Vitro’s flat glass furnaces in Carlisle, PA. Revenues for the Glass Container unit, were essentially flat at USD 53 million, as a result of weak demand for machinery and equipment products (FAMA), partially offset by an increase in Fragrances and Pharmaceutical sales. Measured in Mexican pesos (MXN), Consolidated Net Sales increased 35.2% YoY to MXN 10,068 million.
Despite the adversities caused by the incident at the company’s Carlisle, PA plant, the EBITDA showed an increase of 1.2% compared to the same period of the previous year, mainly due to the acquisition of the Automotive Glass business in the United States, as well as an excellent performance in the Architectural and Automotive markets in Mexico, reaching an EBITDA of USD 90 million in the current quarter, of which Flat Glass contributed USD80 million, and Glass Container contributed USD 10 million. The impact of the Carlisle incident on results as of 31 December 2017, net of the recognized income for the recovery of our insurance policy was USD 14 million without considering the EBIT not generated by the loss of sales. Vitro is continuing to work with its insurance company to recover the pending amounts up to day.
Commenting on Vitro’s performance and outlook, Mr. Adrián Sada Cueva, Chief Executive Officer, said “The results in the fourth quarter were a reflection of the ongoing challenges and adversities we faced during the year. We are seeing good results from recent acquisitions which delivered solid sales increases, as well as from our legacy businesses. But this was partially offset by the incident at our Carlisle plant last August. While one of the two affected float lines recovered average production capacity towards year-end, we are advancing a major refurbishing at the other float line and expect it to be back in operations during 3Q’18.”
“As we mentioned in our previous earnings report, the Architectural Business’ priority is to satisfy our customers demand in a timely manner, for which it was necessary to redistribute our installed capacity and supply finished products from third parties, which resulted in higher operating costs. Additionally, the automotive market in the United States performed in line with our expectations, while for Mexico we experienced low double-digit growth, with a recovery on the demand in the original equipment market as well as a good performance in the replacement market both domestic and export.”
“In the packaging business, our pharmaceutics and cosmetics segment delivered favourable results, with the development of new products in Mexico, and an increased presence in the United States, Colombia, Peru and Brazil. By contrast, our Machinery and Equipment Business FAMA faced a very difficult quarter as our main customer significantly reduced purchases of machinery and equipment, as well as moulds in the fourth quarter.
Mr. Sada concluded, “Despite the significant challenges faced this quarter mainly due to the Carlisle disruption which impacted our cost and supply position in an important way, we have been able to continue to grow our sales and position our company well to continue on our path to deliver value to our stakeholders. 2017 has been a relevant and challenging year in which we have been able to integrate two important companies while also increasing the performance of our legacy businesses. During 2017 we have been able to grow our sales and EBITDA YoY by 97.5% and 51.7% respectively. As we enter 2018 we are doing so as a more integrated company and focused at improving the performance of our businesses while capturing the opportunities to continue to grow.”
Commenting on the financial results, Mr. Claudio Del Valle, Chief Administrative and Financial Officer, said: “The Company generated a net free cash flow of USD 47 million in the quarter, despite the incident at our Carlisle plant, which demonstrates the strong of the fundamentals of our businesses. This allowed us to end the year with a cash balance of USD 180 million after having paid in advance an amount of USD 60 million to the credit we have held with BBVA Bancomer, which reflects the company’s commitment to continue improving our financial position. The foregoing did not affect our planned asset investment programme at all.