Vitro, S.A.B. de C.V. (BMV: VITROA), has announced its unaudited results for the fourth quarter of 2015 and full year 2015.
Commenting on Vitro’s performance and outlook, Mr. Adrián Sada Cueva, Chief Executive Officer, said: “We reported a strong quarter, operationally and financially. Solid top line and EBITDA performance in our Flat Glass and Glass Containers businesses were important contributors to achieving the sixth consecutive year of consolidated EBITDA growth. This was further supported by a healthy balance sheet with negligible debt and strong net free cash flow generation. All of these provide Vitro with the financial flexibility to benefit from future growth opportunities as we continue to drive shareholder value.”
Mr. Sada further noted, “Our two key businesses delivered high double digit growth in both sales and EBITDA supported by our strong focus on driving growth while maintaining tight cost controls and implementing operating efficiency measures. This was achieved despite the sharp foreign exchange volatility that resulted in a 19.6 percent depreciation of the peso against the US dollar and the challenging conditions in some of our markets.”
“Solid market dynamics in the domestic and export construction markets driven by scarcity in Mexico and the economic recovery in the US, together with new clients and higher exports to Original Equipment Manufacturers, and solid sales volumes in the pharmaceutical industry were the main drivers behind top line performance. This more than compensated for weaker cosmetic sales given the challenging industry conditions and lower sales to the automotive replacement segmentand of foreign subsidiaries, particularly Colombia.”
“Higher sales together with increased production efficiencies following the completion of the furnace repair, cost savings and waste control initiatives, as well as lower electric and natural gas prices contributed to the strong increase in EBITDA. Results also benefited from easier comparisons as 4Q’14 results were impacted by capacity constraints as one of our float furnaces which represents approximately one third of our capacity was offline for repairs.”
“Capitalizing on the opportunities we see in the automotive market, in 2015 we were able to win new OEM businesses in the automotive segment totaling an estimated of US$110 million of annual turnover reflecting our customers renewed confidence in Vitro. We expect the Company to begin to benefit partially from this initiative starting 2017 since some platforms start production in future years. We are also moving forward on our strategy to further expand production capacity and drive ongoing cost efficiencies, while maintaining a strong focus on developing value added innovative products to better serve the evolving needs of our automotive and construction clients. As previously announced, mid-2016 we plan to start the repair and capacity expansion of our Mexicali float glass furnace which is expected to be completed during fourth quarter 2016. This year we also expect to advance the construction of a new float glass furnace which is anticipated to become operational in 2017, to increase the production capacity for the OEM segment and replacement market as well as to keep advancing in our project of the new Brazilian plant for cosmetics and perfumery.”
“The effort of our team to continue building a stronger and more focused Vitro in this new stage of the Company is evident in the results we are reporting today. We appreciate the support of Vitro’s stakeholders and remain committed to continue taking the strategic decisions that create the most value…”
Commenting on the balance sheet, Mr. Claudio Del Valle, Chief Administrative and Financial Officer, noted: “Vitro closed the year with a strong balance sheet, providing the Company with the financial flexibility to maximize future growth opportunities.Total debt decreased to US$1 million from US$1,188 million in 4Q’14 reflecting debt pay down in 3Q’15 of virtually all of Vitro’s debt utilizing a portion of the proceeds from the sale of the Food and Beverages Glass Container business. This also eliminated the Company’s exposure to U.S. dollar denominated debt in a weaker peso environment. Our financial position is further supported by Vitro’s solid cash position of US$414 million, a 130.4 percent YoY increase. We remain focused on driving operational efficiencies and are pleased to report an improvement in net free cash flow to US$60 million in 4Q’15, from negative net free cash flow of US$41 million in the year-ago quarter. The good performance was driven by higher EBITDA and stronger working capital related to a decrease in value added tax balance.”