MEXICO CITY--(BUSINESS WIRE)--Elementia, S.A.B. de C.V. (BMV:ELEMENT*) (“the Company”, or “Elementia”) announced today its financial and operating results for the fourth quarter 2016 (“4Q16”) and twelve-month period ended December 31, 2016 (“12M16”). Figures in this report have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Figures are stated in nominal Mexican pesos ($) and all comparisons are made against the same period of the previous year (“4Q15” and “12M15”), unless otherwise specified.
FOURTH QUARTER 2016 HIGHLIGHTS
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In line with expectations and despite macroeconomic volatility,
Elementia reported extraordinary growth on a consolidated basis:
- EBITDA rose 48% in 4Q16 and 20% in 12M16, reaching $986 million and $3.59 billion, respectively. For comparison purposes, excluding Cement USA, this line item grew by 23% in 4Q16 and 14% in 12M16. During the quarter, the Cement Division Mexico increased 29%, the Metal Products Division was up by 39% and BuildingSystems rose 19% reflecting the initiation of the Division’s recovery.
- Net sales increased 36% in 4Q16 and 12% in 12M16, reaching $5.45 billion and $19.09 billion, respectively. For comparison purposes, excluding Cement USA, this line item grew by 18% in 4Q16 and 8% in 12M16.
- Operating income grew 75% in 4Q16 and 27% in 12M16, reaching $576 million and $2.34 billion, respectively. For comparison purposes, excluding Cement USA, this line item grew by 57% in 4Q16 and 24% in 12M16.
- To date, investments in the expansion of the Cement Division’s capacity reached $3.70 billion, which represents close to 90% of the total investment.
- Cash flow generation before capital expenditure (CAPEX) as of December 31, 2016 was $3.41 billion, representing 95% of EBITDA.
- A capital increase of $4.37 billion was completed on October 28, 2016 through the subscription of 218,435,955 shares at a price of $20.00 per share, representing a primary subscription of over 95%. The proceeds from the capital increase were mainly allocated towards the acquisition of a 55% stake of Giant Cement Holding, Inc. (“Giant”).
- Elementia acquired a 55% stake of Giant for US$220 million; adding over 2.8 million tons of cement production capacity per year.
The transaction can be summarized as follows:
Giant had a debt (convert) which required its liquidation to execute the transaction. In order to settle this debt, and therefore complete the transaction, Elementia granted a loan to Giant for US$305 million dollars which were used to make the first prepayment of Giant’s debt. Moreover, Elementia paid US$220 million dollars for a 55% stake of Giant. The US$220 million dollars were used to make the convert’s final payment. Once concluded the acquisition, this loan became an intercompany loan.
- In order to protect Elementia from currency fluctuations derived from the acquisition of Giant, the Company hedged more than 90% of the resources and the loan that was given to acquire 55% of Giant at a rate slightly above $19 Mexican pesos per dollar; which represented an exchange gain for the Company.
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PERFORMANCE SUMMARY |
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Consolidated Fourth Quarter |
Accumulated Consolidated | |||||||||||||||||
| (millions of pesos) | (millions of pesos) | |||||||||||||||||
| 4Q16 | 4Q15 | %Var. | Dec-16 | Dec-15 | %Var. | |||||||||||||
| 5,451 | 4,014 | 36% | Net sales | 19,090 | 16,974 | 12% | ||||||||||||
| 576 | 330 | 75% | Operating income | 2,349 | 1,849 | 27% | ||||||||||||
| 11% | 8% | Operating Margin | 12% | 11% | ||||||||||||||
| 986 | 665 | 48% | EBITDA | 3,595 | 3,002 | 20% | ||||||||||||
| 18% | 17% | EBITDA margin | 19% | 18% | ||||||||||||||
For a full version of this earnings release with financial statements, go to: www.elementia.com in the Investor Relations section.
CONFERENCE CALL INFORMATION
Elementia will hold a conference call to discuss its 4Q16 results on Thursday, February 23, 2017 at 10:00am (Mexico) / 11:00am (ET). To access the call, please dial: From within the US: 1-800-311-9402, International participants: 1-334-323-7224 (Passcode: 35941) and via an audio-only webcast at https://www.webcaster4.com/Webcast/Page/1398/19621. Participants are requested to connect 15 minutes prior to the call. A replay of the webcast will be available at www.elementia.com.
ABOUT ELEMENTIA
Elementia is the leading building materials company with a strong presence in the American Continent. Its organic growth and the result of its mergers and acquisitions has enabled it to be an integral platform with more than 4,000 products, backed by recognized local and regional brands including: Fortaleza ® / Nacobre ® / Mexalit ® / Eureka ® / Allura ® / Plycem ® / Eternit ® / Duralit ® / Fibraforte ® / Frigocel ® / Keystone ® / Dragon ® / Giant ®. Elementia’s products and solutions meet the needs of the different construction methods that exist in the market it operates in, and it is able to supply up to 75% of the materials used to build a typical house. The Company has over 6,600 employees, operating presence in 9 countries and a broad distribution network for its three business divisions: Cement, Metal Products and BuildingSystems. Elementia is the No. 1 producer of cement in Latin America and No. 2 in the United States. It is also one of the largest and most diversified copper manufacturers and copper alloys worldwide, and the most recent player to enter the Mexican cement market in 70 years. For more information go to www.elementia.com.
FORWARD-LOOKING STATEMENTS
This press release includes declarations relating to, and is subject to, current expectations as factors, including, without limitation, global economic and market conditions, the costs of raw materials and energy, expenses, revenues and earnings of Elementia and its Divisions and that of the relevant markets where its companies operate. These expectations are based on certain preliminary information, internal estimates, expectations and assumptions of management. All of these things are subject to a series of risks and uncertainties in the projection of future conditions, regulations in the relevant market, products and fields of industry issued by the respective authorities, as well as events and results. Real results could differ significantly from the expectations expressed in prospective declarations. Elementia may choose to update these prospects, but specifically rejects any responsibility to do so, except as required by law.
