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Grupo Elektra Announces Revenue of Ps.18,105 Million and EBITDA of Ps.2,083 Million in 2Q15

20:00 EDT 22 Jul 2015 | Globe Newswire

—Continuous Dynamism in Sales From the Commercial Business; 16% Increase to Ps.6,438 Million in the Period—

—14% Growth in Consolidated Deposits to Ps.97,843 Million Generates Solid Perspectives in the Financial Business—

MEXICO CITY, July 23, 2015 (GLOBE NEWSWIRE) -- Grupo Elektra, S.A.B. de C.V. (BMV: ELEKTRA*; Latibex: XEKT), Latin America's leading specialty retailer and financial services company and the largest non-bank provider of cash advance services in the United States, reported today its financial results for the second quarter and first half of 2015.

Consolidated second quarter results

Consolidated revenue totaled Ps.18,105 million, compared to Ps.18,205 million for the same period last year. Costs and operating expenses were Ps.16,022 million, from Ps.16,066 million for the same period of 2015.

As a result, Grupo Elektra reported EBITDA of Ps.2,083 million, from Ps.2,140 million for the previous year's quarter; EBITDA margin was 12% this period.

The company reported a net loss of Ps.1,423 million, from a net loss of Ps.1,114 million a year ago.

       
  2Q 2014 2Q 2015 Change
      Ps. %
         
Consolidated revenue $18,205 $18,105  $ (100) -1%
         
EBITDA $2,140 $2,083  $ (57) -3%
         
Net result  $ (1,114)  $ (1,423)  $ (309) -28%
         
Net result per share  $ (4.70)  $ (6.07)  $ (1.37) --
         
Figures in millions of pesos 
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
As of June 30, 2014, Elektra outstanding shares were 235.8 million and as of June 30, 2015, were 234.6 million.

Revenue

Consolidated revenue decreased 1%, as a result of a reduction of 8% in financial revenue, partly compensated with a 16% increase in commercial sales. 

The decrease in financial revenue —to Ps.11,668 million from Ps.12,668 million from the previous year— results mainly from a 11% reduction in revenue from Banco Azteca Mexico, to Ps.7,894 million, compared to ps.8,830 million from previous year.

Commercial sales —of Ps.6,438 million from Ps.5,537 million last year— increased as a result of strategies that generate growing customer satisfaction through an optimal mix of merchandise on the sales floor, which is offered by a highly trained sales force under the most competitive market conditions.

Costs and expenses

Consolidated costs for the quarter increased 5% to Ps.8,138 million, from Ps.7,728 million from the previous year. The change is mainly due to a 14% increase in commercial cost —in line with the performance of merchandise sales— and a 4% decrease in financial cost, derived mainly for less interest paid.

Sales, administration and promotion expenses decreased 5% to Ps.7,884 million, in the context of strategies that generated important operating efficiencies during the quarter.

EBITDA and net result

Consolidated EBITDA decreased 3% to Ps.2,083 million this quarter.

The most significant change below EBITDA was a decrease of Ps.506 million in other financial results, as a consequence of a bigger reduction in the market value of the underlying assets of financial instruments owned by the company –which does not imply cash flow– compared to last year.

Grupo Elektra reported a net loss of Ps.1,423 million, compared to a net loss of Ps.1,114 million a year ago.

Consolidated balance sheet

Loan portfolio and deposits

Banco Azteca Mexico, Advance America and Banco Azteca Latin America's consolidated gross portfolio as of June 30, 2015, was Ps.65,745 million, compared to Ps.77,204 million from the previous year. Consolidated delinquency rate was 9% at the end of the period.

The gross portfolio of Banco Azteca Mexico was Ps.51,173 million, compared to Ps.63,382 million a year ago. The delinquency rate of Banco Azteca Mexico at the end of the quarter was 9.2%. The non-performing loan portfolio is reserved 1.47 times. The average term of the credit portfolio for principal credit lines –consumer, personal loans and Tarjeta Azteca– was 61 weeks at the end of the second quarter.

The Advance America loan portfolio was Ps.4,527 million, 12% higher than the Ps.4,035 million a year ago. More dynamism in the operations of the company is expected with the successful launch of title loans in a growing number of points of sale in the U.S.

Grupo Elektra consolidated deposits grew 14%, to Ps.97,843 million, compared to Ps.85,628 million a year ago. Deposits of Banco Azteca Mexico were Ps.91,632 million, 15% higher than the Ps.79,800 million a year ago. Financial products that satisfy clients in the best way, with world class service, resulted in the increase in deposits. The higher deposit base sets a strong foundation for future financial business growth.

As of June 30, 2015, the estimated capitalization index of Banco Azteca Mexico was 17.5%.

Debt

Consolidated debt with cost as of June 30, 2015, was Ps.18,589 million, from Ps.18,572 million from the prior year.

Consolidated debt at the end of June 2015 was comprised of Ps.17,206 million for the commercial business, and Ps.1,382 million for the financial business. The balance of cash, cash equivalents and marketable securities for the commercial business was Ps.14,434 million at the end of the period; as a result, that division net debt balance is Ps.2,772 million.

Expansion

Grupo Elektra currently has 6,473 points of sale, compared to 6,872 a year ago.

Grupo Elektra has 3,496 points of sale in Mexico, 2,372 in the United States, and 605 in Central and South America. The extensive distribution network allows the company to maintain close contact with clients; granting superior market positioning in the countries where it operates.

Six months consolidated results

Total consolidated revenue in the first six months of the year was Ps.37,204 million, 5% higher than the Ps.35,394 million for the same period of 2014, boosted mainly by a 19% growth from the commercial business.

EBITDA was Ps.5,248 million, 10% higher than the Ps.4,753 million for the same period a year ago; the EBITDA margin in the first six months of 2015 was 14%, one percentage point above the prior year. The company registered a consolidated net loss of Ps.4,703 million, compared to a loss of Ps.1,289 million a year ago, mainly due a decrease in the market value of underlying financial instruments that the company holds, which doesn't imply cash flow, compared to the prior year.

       
  6M 2014 6M 2015 Change
      Ps. %
         
Consolidated revenue $35,394 $37,204 $1,810 5%
         
EBITDA $4,753 $5,248 $495 10%
         
Net result  $ (1,289)  $ (4,703)  $ (3,414) --
         
Net result per share  $ (5.47)  $ (20.05)  $ (14.58) --
         
Figures in millions of pesos 
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
As of June 30, 2014, Elektra outstanding shares were 235.8 million and as of June 30, 2015, were 234.6 million.


Company Profile:

Grupo Elektra (www.grupoelektra.com.mx) is Latin America's leading financial services company and specialty retailer and the largest non-bank provider of cash advance services in the United States. The Group operates over 6,000 points of sale in Mexico, USA, Brazil, Guatemala, Honduras, Peru, Panama and El Salvador.

Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, contributing to build the middle class of the countries in which they operate and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com), Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. The companies include Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Advance America (www.advanceamerica.net), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx), Totalplay (www.totalplay.com.mx) and Enlace TPE (www.enlacetpe.com.mx). Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, the member companies share a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.

Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Other risks that may affect Grupo Elektra and its subsidiaries are identified in documents sent to securities authorities. 

GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS
 
  2Q14 2Q15 Change
             
Financial income  12,668 70%  11,668 64%  (1,001) -8%
Commercial income  5,537 30%  6,438 36%  901 16%
Income  18,205 100%  18,105 100%  (100) -1%
             
Financial cost  3,855 21%  3,708 20%  (147) -4%
Commercial cost  3,873 21%  4,430 24%  557 14%
Costs  7,728 42%  8,138 45%  410 5%
             
Gross income  10,478 58%  9,968 55%  (510) -5%
             
Sales, administration and promotion expenses  8,338 46%  7,884 44%  (454) -5%
Depreciation and amortization  674 4%  632 3%  (43) -6%
Operating expenses  9,012 50%  8,516 47%  (496) -6%
             
Operating income  1,465 8%  1,452 8%  (14) -1%
             
EBITDA  2,140 12%  2,083 12%  (57) -3%
             
Comprehensive financial result:            
Interest income  88 0%  84 0%  (4) -5%
Interest expense  (387) -2%  (389) -2%  (2) -1%
Foreign exchange gain, net  33 0%  36 0%  3 8%
Other financial results, net  (2,560) -14%  (3,066) -17%  (506) -20%
   (2,826) -16%  (3,336) -18%  (510) -18%
             
Other (expense) income, net  (270) -1%  29 0%  300 111%
             
Participation in the net income of            
CASA and other associated companies  48 0%  (131) -1%  (179) --
             
Loss before income tax  (1,583) -9%  (1,986) -11%  (403) -25%
             
Income tax  507 3%  574 3%  67 13%
             
Loss before discontinued operations  (1,076) -6%  (1,412) -8%  (335) -31%
             
Result from discontinued operations  (37) 0%  (11) 0%  26 70%
             
Consolidated net loss  (1,114) -6%  (1,423) -8%  (309) -28%
             
GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
MILLIONS OF MEXICAN PESOS
 
  6M14 6M15 Change
             
Financial income  24,772 70%  24,542 66%  (230) -1%
Commercial income  10,623 30%  12,662 34%  2,039 19%
Income  35,394 100%  37,204 100%  1,810 5%
             
Financial cost  7,452 21%  8,407 23%  955 13%
Commercial cost  7,274 21%  8,629 23%  1,355 19%
Costs  14,726 42%  17,035 46%  2,309 16%
             
Gross income  20,668 58%  20,169 54%  (500) -2%
             
Sales, administration and promotion expenses  15,916 45%  14,921 40%  (995) -6%
Depreciation and amortization  1,327 4%  1,231 3%  (96) -7%
Operating expenses  17,243 49%  16,152 43%  (1,091) -6%
             
Operating Income  3,426 10%  4,017 11%  591 17%
             
EBITDA  4,753 13%  5,248 14%  495 10%
             
Comprehensive financial result:            
Interest income  216 1%  198 1%  (18) -8%
Interest expense  (765) -2%  (725) -2%  40 5%
Foreign exchange gain, net  117 0%  77 0%  (40) -34%
Other financial results, net  (4,548) -13%  (9,811) -26%  (5,263) -116%
   (4,981) -14%  (10,261) -28%  (5,281) -106%
             
Other expense, net  (282) -1%  (7) 0%  275 98%
             
Participation in the net income expense of            
CASA and other associated companies  11 0%  (261) -1%  (272) --
             
Loss before income tax  (1,826) -5%  (6,512) -18%  (4,687) -257%
             
Income tax  623 2%  1,837 5%  1,214 -195%
             
Loss before discontinued operations  (1,203) -3%  (4,676) -13%  (3,473) -289%
             
Result from discontinued operations  (86) 0%  (27) 0%  59 68%
             
Consolidated net loss  (1,289) -4%  (4,703) -13%  (3,414) -265%
             
GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
MILLIONS OF MEXICAN PESOS
 
   Commercial
Business
 Financial
Business
 Grupo
Elektra
 Commercial
Business
 Financial
Business
 Grupo
Elektra
 
Change
 
                 
  At June 30, 2014 At June 30, 2015            
                 
Cash and cash equivalents  2,785  15,644  18,429  2,685  20,350  23,035  4,606 25%
                 
Marketable financial instruments  11,998  24,351  36,349  11,749  52,301  64,050  27,702 76%
                 
Performing loan portfolio  --   52,773  52,773  --   43,753  43,753  (9,020) -17%
Total past-due loans  --   5,875  5,875  --   5,606  5,606  (269) -5%
Gross loan portfolio  --   58,648  58,648  --   49,359  49,359  (9,289) -16%
                 
Allowance for credit risks  --   8,670  8,670  --   8,691  8,691  22 0%
                 
Loan portfolio, net  --   49,978  49,978  --   40,668  40,668  (9,311) -19%
                 
Inventories  6,390  --   6,390  6,261    6,261  (129) -2%
                 
Other current assets  4,623  5,490  10,113  2,108  6,248  8,356  (1,758) -17%
                 
Total current assets  25,797  95,463  121,260  22,803  119,567  142,370  21,110 17%
                 
Financial instruments  9,814  222  10,037  11,504  251  11,755  1,718 17%
                 
Performing loan portfolio  --   18,210  18,210  --   16,083  16,083  (2,127) -12%
Total past-due loans  --   345  345  --   303  303  (43) -12%
Loan portfolio  --   18,556  18,556  --   16,386  16,386  (2,170) -12%
                 
Other non-current assets  1,449  969  2,418  1  912  913  (1,505) -62%
                 
Investment in shares  4,420  --   4,420  3,975    3,975  (445) -10%
Property, furniture, equipment and                
investment in stores, net  4,816  2,839  7,654  4,106  2,850  6,956  (698) -9%
Intangible assets  629  6,537  7,166  547  7,605  8,152  985 14%
Other assets  659  682  1,341  1,112  410  1,521  181 13%
TOTAL ASSETS  47,584  125,268  172,852  44,048  147,980  192,029  19,177 11%
                 
Demand and term deposits    85,628  85,628    97,843  97,843  12,214 14%
Creditors from repurchase agreements    2,792  2,792    3,963  3,963  1,171 42%
Short-term debt  3,182  493  3,674  7,634  253  7,887  4,212 115%
Short-term liabilities with cost  3,182  88,913  92,095  7,634  102,059  109,693  17,597 19%
                 
Suppliers and other short-term liabilities  9,751  6,130  15,881  7,291  8,210  15,501  (380) -2%
Short-term liabilities without cost  9,751  6,130  15,881  7,291  8,210  15,501  (380) -2%
                 
Total short-term liabilities  12,933  95,043  107,976  14,925  110,269  125,194  17,218 16%
                 
Long-term debt  13,490  1,408  14,898  9,572  1,129  10,702  (4,196) -28%
Long-term liabilities with cost  13,490  1,408  14,898  9,572  1,129  10,702  (4,196) -28%
                 
Long-term liabilities without cost  4,578  1,294  5,872  3,319  2,887  6,206  334 6%
                 
Total long-term liabilities  18,068  2,702  20,770  12,891  4,016  16,908  (3,862) -19%
                 
TOTAL LIABILITIES  31,001  97,745  128,746  27,816  114,286  142,102  13,356 10%
                 
TOTAL STOCKHOLDERS' EQUITY  16,583  27,523  44,106  16,232  33,695  49,927  5,821 13%
                 
LIABILITIES + EQUITY  47,584  125,268  172,852  44,048  147,980  192,029  19,177 11%
                 
INFRASTRUCTURE
 
  2Q14 2Q15 Change
             
Points of sale in Mexico            
Elektra (1)  984 14%  973 15%  (11) -1%
Salinas y Rocha (1)  55 1%  53 1%  (2) -4%
Freestanding branches  2,439 35%  2,207 34%  (232) -10%
Blockbuster  326 5%  263 4%  (63) -19%
Total  3,804 55%  3,496 54%  (308) -8%
             
Points of sale in Central and South America            
Elektra (1)  206 3%  190 3%  (16) -8%
Freestanding branches  422 6%  415 6%  (7) -2%
Total  628 9%  605 9%  (23) -4%
             
Points of sale in North America            
Advance America  2,440 36%  2,372 37%  (68) -3%
Total  2,440 36%  2,372 37%  (68) -3%
             
TOTAL  6,872 100%  6,473 100%  (399) -6%
             
(1) Each store has a Banco Azteca branch.            
             
             
Floor space (m²)            
Elektra Mexico  844,600 49%  838,780 51%  (5,820) -1%
Elektra Central and South America  150,662 9%  143,315 9%  (7,347) -5%
Salinas y Rocha  58,995 3%  56,327 3%  (2,668) -5%
Freestanding branches  242,274 14%  199,862 12%  (42,412) -18%
Advance America  334,320 19%  324,964 20%  (9,356) -3%
Blockbuster  109,664 6%  82,000 5%  (27,664) -25%
TOTAL  1,740,514 100%  1,645,248 100%  (95,266) -5%
             
             
Employees            
Mexico  62,242 77%  51,577 75%  (10,665) -17%
Central and South America  11,324 14%  10,062 15%  (1,262) -11%
North America  6,848 9%  6,822 10%  (26) 0%
Total employees  80,414 100%  68,461 100%  (11,953) -15%
CONTACT: Investor Relations:

         Bruno Rangel
         Grupo Salinas
         Tel. +52 (55) 1720-9167
         jrangelk@gruposalinas.com.mx
         
         Rolando Villarreal
         Grupo Elektra S.A.B. de C.V.
         Tel. +52 (55) 1720-9167
         rvillarreal@gruposalinas.com.mx
         
         Press Relations

         Luciano Pascoe
         Grupo Salinas
         Tel. +52 (55) 1720-1313 ext. 36553
         lpascoe@gruposalinas.com.mx
         
         Daniel McCosh
         Grupo Salinas
         Tel. +52 (55) 1720-0059
         dmccosh@gruposalinas.com.mx

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