—EBITDA increases 64% to Ps.3,518 million in the period—
—Solid performance from both the commercial and financial divisions generate an increase of 8% in consolidated revenue to Ps.19,517 million—
—Notable reduction in the delinquency rate of Banco Azteca Mexico; decreases more than six percentage points to 2.9%—
MEXICO CITY, July 21, 2016 (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 of 2016.
Consolidated second quarter results
Consolidated revenue was Ps.19,517 million, 8% above the Ps.18,027 million for the same quarter of last year. Costs and operating expenses increased 1% to Ps.15,998 million, compared to Ps.15,878 million for the same period of 2015.
As a result, Grupo Elektra reported EBITDA of Ps.3,518 million, 64% higher than the Ps.2,149 million of the previous year’s quarter; EBITDA margin was 18% this period, six percentage point above the previous year.
Operating profit grew 87% to Ps.2,904 million during the quarter, from Ps.1,550 million in same period of 2015.
The company reported a net loss of Ps.79 million, compared to a net loss of Ps.1,423 million a year ago.
| 2Q 2015 | 2Q 2016 | Change | ||||||||||||||||||
| Ps. | % | |||||||||||||||||||
| Consolidated revenue | $ | 18,027 | $ | 19,517 | $ | 1,489 | 8 | % | ||||||||||||
| EBITDA | $ | 2,149 | $ | 3,518 | $ | 1,369 | 64 | % | ||||||||||||
| Operating profit | $ | 1,550 | $ | 2,904 | $ | 1,354 | 87 | % | ||||||||||||
| Net result | $ | (1,423 | ) | $ | (79 | ) | $ | 1,344 | 94 | % | ||||||||||
| Net result per share | $ | (6.05 | ) | $ | (0.33 | ) | $ | 5.72 | 94 | % | ||||||||||
Figures in millions of pesos EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. As of June 30, 2015, Elektra outstanding shares were 235.1 million and as of June 30, 2016, were 237.9 million.
Revenue
Consolidated revenue increased 8%, as a result of growth of 14% and 5% in commercial sales and financial revenues, respectively.
The increase in sales from the commercial division — of Ps.7,344 million from Ps.6,435 million last year — reflects strategies that give millions of families access to world-class products and services under the most competitive market conditions with optimal client service.
The increase in financial revenue — to Ps.12,172 million from Ps.11,593 million from the previous year — results mainly from a 16% growth in revenue of Advance America, to Ps.2,780 million, in comparison to Ps.2,393 million a year ago.
Costs and expenses
Consolidated costs for the quarter decreased 8% to Ps.7,457 million, from Ps.8,091 million in the previous year, resulting from a 27% decrease in financial cost — largely driven by a reduction in provisions for loan losses, along with the strength in asset quality — and an 8% increase in commercial costs, in line with the performance of commercial revenue.
Sales, administration and promotion expenses increased 10% to Ps.8,541 million, as a result of higher personnel expenses — from higher compensation schemes that encourage productivity — as well as an increase in operating expenses.
EBITDA and net result
Consolidated EBITDA grew 64% to Ps.3,518 million this quarter.
Operating income increased 87%, to Ps.2,904 million, from Ps.1,550 million for the same quarter of 2015.
The most significant change below EBITDA was a positive variation of Ps.270 million in other financial results, as a consequence of a smaller 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.79 million, compared to a net loss of Ps.1,423 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 grew 4% to Ps.68,440 million, from Ps.65,745 million from the previous year. Consolidated delinquency rate was 3.7% at the end of the period, from 9% in the previous year.
The gross portfolio of Banco Azteca Mexico grew 7% to Ps.54,515 million, from Ps.51,174 million a year ago.
The delinquency rate of the bank at the end of the quarter was 2.9%, more than six percentage points lower than the 9.2% from the previous year. The average term of the credit portfolio for principal credit lines – consumer, personal loans and Tarjeta Azteca – was 55 weeks at the end of the second quarter.
The Advance America loan portfolio was Ps.5,111 million, 13% higher than the Ps.4,527 million a year ago.
Grupo Elektra consolidated deposits increased 6% to Ps.103,496 million, from Ps.97,843 million a year ago. Deposits of Banco Azteca Mexico were Ps.97,588 million, 7% higher than the Ps.91,633 million a year ago.
As of June 30, 2016, the estimated capitalization index of Banco Azteca Mexico was 17.9%.
Debt
Consolidated debt with cost as of June 30, 2016, was Ps.18,303 million, from Ps.18,589 million for the prior year.
Consolidated debt was comprised of Ps.15,983 million for the commercial business, and Ps.2,321 million for the financial business. The total balance of cash, cash equivalents and marketable securities for the commercial business was Ps.23,482 million at the end of the period; as a result, the net cash commercial balance —excluding debt with cost— is favorable at Ps.7,499 million.
Infrastructure
Grupo Elektra currently has 7,492 points of sale, compared to 8,647 units a year ago. The reduction results from strategies that focus on maximizing the profitability of the units.
The company has 4,555 points of sale in Mexico, 2,208 in the United States, and 729 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 grew 2% to Ps.37,958 million, from Ps.37,034 million for the same period of 2015, boosted mainly by 11% growth in the commercial business.
EBITDA was Ps.6,855 million, 29% higher than the Ps.5,332 million for the same period a year ago; the EBITDA margin in the first six months of 2016 was 18%, four percentage point above the prior year. Operating profit grew 42% to Ps.5,834 million during the period.
The company registered consolidated net income of Ps.1,080 million, compared to a loss of Ps.4,703 million a year ago, mainly due a smaller reduction in the market value of underlying financial instruments that the company holds, which doesn’t imply cash flow, compared to the prior year.
| 6M 2015 | 6M 2016 | Change | ||||||||||||||||||
| Ps. | % | |||||||||||||||||||
| Consolidated revenue | $ | 37,034 | $ | 37,958 | $ | 924 | 2 | % | ||||||||||||
| EBITDA | $ | 5,332 | $ | 6,855 | $ | 1,523 | 29 | % | ||||||||||||
| Operating profit | $ | 4,099 | $ | 5,834 | $ | 1,735 | 42 | % | ||||||||||||
| Net result | $ | (4,703 | ) | $ | 1,080 | $ | 5,782 | ---- | ||||||||||||
| Net result per share | $ | (20 | ) | $ | 4.54 | $ | 24.54 | ---- | ||||||||||||
Figures in millions of pesos EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. As of June 30, 2015, Elektra outstanding shares were 235.1 million and as of June 30, 2016, were 237.9 million.
Company Profile:
Grupo Elektra 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 close to 8,000 points of contact in Mexico, USA, 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 TV Azteca ( www.tvazteca.com ; www.irtvazteca.com), Azteca US (us.azteca.com), Grupo Elektra ( www.elektra.com.mx : 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 TP (enlacetp.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 | ||||||||||||||||||||||
| 2Q15 | 2Q16 | Change | ||||||||||||||||||||
| Financial income | 11,593 | 64 | % | 12,172 | 62 | % | 580 | 5 | % | |||||||||||||
| Commercial income | 6,435 | 36 | % | 7,344 | 38 | % | 910 | 14 | % | |||||||||||||
| Income | 18,027 | 100 | % | 19,517 | 100 | % | 1,489 | 8 | % | |||||||||||||
| Financial cost | 3,667 | 20 | % | 2,673 | 14 | % | (995 | ) | -27 | % | ||||||||||||
| Commercial cost | 4,424 | 25 | % | 4,784 | 25 | % | 360 | 8 | % | |||||||||||||
| Costs | 8,091 | 45 | % | 7,457 | 38 | % | (635 | ) | -8 | % | ||||||||||||
| Gross income | 9,936 | 55 | % | 12,060 | 62 | % | 2,124 | 21 | % | |||||||||||||
| Sales, administration and promotion expenses | 7,787 | 43 | % | 8,541 | 44 | % | 754 | 10 | % | |||||||||||||
| EBITDA | 2,149 | 12 | % | 3,518 | 18 | % | 1,369 | 64 | % | |||||||||||||
| Depreciation and amortization | 629 | 3 | % | 643 | 3 | % | 14 | 2 | % | |||||||||||||
| Other income, net | (29 | ) | 0 | % | (28 | ) | 0 | % | 1 | 5 | % | |||||||||||
| Operating Income | 1,550 | 9 | % | 2,904 | 15 | % | 1,354 | 87 | % | |||||||||||||
| Comprehensive financial result: | ||||||||||||||||||||||
| Interest income | 84 | 0 | % | 162 | 1 | % | 78 | 94 | % | |||||||||||||
| Interest expense | (389 | ) | -2 | % | (334 | ) | -2 | % | 55 | 14 | % | |||||||||||
| Foreign exchange gain, net | 36 | 0 | % | 116 | 1 | % | 80 | 222 | % | |||||||||||||
| Other financial results, net | (3,066 | ) | -17 | % | (2,796 | ) | -14 | % | 270 | 9 | % | |||||||||||
| (3,335 | ) | -19 | % | (2,852 | ) | -15 | % | 484 | 14 | % | ||||||||||||
| Participation in the net income of | ||||||||||||||||||||||
| CASA and other associated companies | (131 | ) | -1 | % | (145 | ) | -1 | % | (14 | ) | -11 | % | ||||||||||
| (Loss) income before income tax | (1,917 | ) | -11 | % | (93 | ) | 0 | % | 1,824 | 95 | % | |||||||||||
| Income tax | 576 | 3 | % | 14 | 0 | % | (562 | ) | -98 | % | ||||||||||||
| (Loss) income before discontinued operations | (1,341 | ) | -7 | % | (79 | ) | 0 | % | 1,261 | 94 | % | |||||||||||
| Result from discontinued operations | (82 | ) | 0 | % | 1 | 0 | % | 83 | ---- | |||||||||||||
| Consolidated net (loss) income | (1,423 | ) | -8 | % | (79 | ) | 0 | % | 1,344 | 94 | % | |||||||||||
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||||||||||||||||
| CONSOLIDATED INCOME STATEMENTS | ||||||||||||||||||||||
| MILLIONS OF MEXICAN PESOS | ||||||||||||||||||||||
| 6M15 | 6M16 | Change | ||||||||||||||||||||
| Financial income | 24,384 | 66 | % | 23,956 | 63 | % | (428 | ) | -2 | % | ||||||||||||
| Commercial income | 12,650 | 34 | % | 14,002 | 37 | % | 1,352 | 11 | % | |||||||||||||
| Income | 37,034 | 100 | % | 37,958 | 100 | % | 924 | 2 | % | |||||||||||||
| Financial cost | 8,335 | 23 | % | 4,968 | 13 | % | (3,367 | ) | -40 | % | ||||||||||||
| Commercial cost | 8,616 | 23 | % | 9,244 | 24 | % | 628 | 7 | % | |||||||||||||
| Costs | 16,951 | 46 | % | 14,212 | 37 | % | (2,739 | ) | -16 | % | ||||||||||||
| Gross income | 20,083 | 54 | % | 23,745 | 63 | % | 3,662 | 18 | % | |||||||||||||
| Sales, administration and promotion expenses | 14,751 | 40 | % | 16,891 | 44 | % | 2,140 | 15 | % | |||||||||||||
| EBITDA | 5,332 | 14 | % | 6,855 | 18 | % | 1,523 | 29 | % | |||||||||||||
| Depreciation and amortization | 1,226 | 3 | % | 1,188 | 3 | % | (38 | ) | -3 | % | ||||||||||||
| Other expense (income), net | 7 | 0 | % | (168 | ) | 0 | % | (174 | ) | ---- | ||||||||||||
| Operating Income | 4,099 | 11 | % | 5,834 | 15 | % | 1,735 | 42 | % | |||||||||||||
| Comprehensive financial result: | ||||||||||||||||||||||
| Interest income | 198 | 1 | % | 395 | 1 | % | 197 | 100 | % | |||||||||||||
| Interest expense | (725 | ) | -2 | % | (662 | ) | -2 | % | 63 | 9 | % | |||||||||||
| Foreign exchange gain, net | 78 | 0 | % | 172 | 0 | % | 94 | 120 | % | |||||||||||||
| Other financial results, net | (9,811 | ) | -26 | % | (4,004 | ) | -11 | % | 5,807 | 59 | % | |||||||||||
| (10,260 | ) | -28 | % | (4,099 | ) | -11 | % | 6,161 | 60 | % | ||||||||||||
| Participation in the net income of | ||||||||||||||||||||||
| CASA and other associated companies | (261 | ) | -1 | % | (216 | ) | -1 | % | 46 | 18 | % | |||||||||||
| (Loss) income before income tax | (6,422 | ) | -17 | % | 1,519 | 4 | % | 7,941 | ---- | |||||||||||||
| Income tax | 1,842 | 5 | % | (438 | ) | -1 | % | (2,280 | ) | ---- | ||||||||||||
| (Loss) income before discontinued operations | (4,580 | ) | -12 | % | 1,082 | 3 | % | 5,661 | ---- | |||||||||||||
| Result from discontinued operations | (123 | ) | 0 | % | (2 | ) | 0 | % | 121 | 98 | % | |||||||||||
| Consolidated net (loss) income | (4,703 | ) | -13 | % | 1,080 | 3 | % | 5,782 | ---- | |||||||||||||
| 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, 2015 | At June 30, 2016 | |||||||||||||||
| Cash and cash equivalents | 2,685 | 20,350 | 23,035 | 2,011 | 18,899 | 20,911 | (2,125 | ) | -9 | % | ||||||
| Marketable financial instruments | 11,749 | 52,301 | 64,050 | 21,471 | 53,849 | 75,321 | 11,270 | 18 | % | |||||||
| Performing loan portfolio | - | 43,753 | 43,753 | - | 48,196 | 48,196 | 4,443 | 10 | % | |||||||
| Total past-due loans | - | 5,606 | 5,606 | - | 2,473 | 2,473 | (3,134 | ) | -56 | % | ||||||
| Gross loan portfolio | - | 49,359 | 49,359 | - | 50,669 | 50,669 | 1,310 | 3 | % | |||||||
| Allowance for credit risks | - | 8,691 | 8,691 | - | 6,426 | 6,426 | (2,265 | ) | -26 | % | ||||||
| Loan portfolio, net | - | 40,668 | 40,668 | - | 44,243 | 44,243 | 3,575 | 9 | % | |||||||
| Inventories | 6,261 | - | 6,261 | 7,059 | - | 7,059 | 798 | 13 | % | |||||||
| Other current assets | 2,108 | 6,248 | 8,356 | 5,801 | 9,160 | 14,962 | 6,606 | 79 | % | |||||||
| Total current assets | 22,803 | 119,567 | 142,370 | 36,343 | 126,151 | 162,494 | 20,124 | 14 | % | |||||||
| Financial instruments | 11,504 | 251 | 11,755 | 8,390 | 292 | 8,682 | (3,072 | ) | -26 | % | ||||||
| Performing loan portfolio | - | 16,083 | 16,083 | - | 17,686 | 17,686 | 1,602 | 10 | % | |||||||
| Total past-due loans | - | 303 | 303 | - | 85 | 85 | (217 | ) | -72 | % | ||||||
| Loan portfolio | - | 16,386 | 16,386 | - | 17,771 | 17,771 | 1,385 | 8 | % | |||||||
| Other non-current assets | 1 | 912 | 913 | - | 764 | 764 | (149 | ) | -16 | % | ||||||
| Investment in shares | 3,975 | - | 3,975 | 3,036 | - | 3,036 | (939 | ) | -24 | % | ||||||
| Property, furniture, equipment and | ||||||||||||||||
| investment in stores, net | 4,106 | 2,850 | 6,956 | 3,674 | 2,753 | 6,427 | (530 | ) | -8 | % | ||||||
| Intangible assets | 547 | 7,605 | 8,152 | 605 | 5,625 | 6,229 | (1,922 | ) | -24 | % | ||||||
| Other assets | 1,112 | 410 | 1,521 | 1,116 | 571 | 1,687 | 165 | 11 | % | |||||||
| TOTAL ASSETS | 44,048 | 147,980 | 192,029 | 53,163 | 153,927 | 207,090 | 15,062 | 8 | % | |||||||
| Demand and term deposits | - | 97,843 | 97,843 | - | 103,496 | 103,496 | 5,653 | 6 | % | |||||||
| Creditors from repurchase agreements | - | 3,963 | 3,963 | - | 2,818 | 2,818 | (1,145 | ) | -29 | % | ||||||
| Short-term debt | 7,634 | 253 | 7,887 | 66 | 534 | 599 | (7,287 | ) | -92 | % | ||||||
| Short-term liabilities with cost | 7,634 | 102,059 | 109,693 | 66 | 106,848 | 106,914 | (2,779 | ) | -3 | % | ||||||
| Suppliers and other short-term liabilities | 7,291 | 8,210 | 15,501 | 16,148 | 7,150 | 23,298 | 7,797 | 50 | % | |||||||
| Short-term liabilities without cost | 7,291 | 8,210 | 15,501 | 16,148 | 7,150 | 23,298 | 7,797 | 50 | % | |||||||
| Total short-term liabilities | 14,925 | 110,269 | 125,194 | 16,214 | 113,998 | 130,211 | 5,017 | 4 | % | |||||||
| Long-term debt | 9,572 | 1,129 | 10,702 | 15,917 | 1,787 | 17,704 | 7,002 | 65 | % | |||||||
| Long-term liabilities with cost | 9,572 | 1,129 | 10,702 | 15,917 | 1,787 | 17,704 | 7,002 | 65 | % | |||||||
| Long-term liabilities without cost | 3,319 | 2,887 | 6,206 | 2,028 | 3,851 | 5,879 | (327 | ) | -5 | % | ||||||
| Total long-term liabilities | 12,891 | 4,016 | 16,908 | 17,945 | 5,639 | 23,583 | 6,675 | 39 | % | |||||||
| TOTAL LIABILITIES | 27,816 | 114,286 | 142,102 | 34,158 | 119,636 | 153,794 | 11,693 | 8 | % | |||||||
| TOTAL STOCKHOLDERS' EQUITY | 16,232 | 33,695 | 49,927 | 19,005 | 34,291 | 53,296 | 3,369 | 7 | % | |||||||
| LIABILITIES + EQUITY | 44,048 | 147,980 | 192,029 | 53,163 | 153,927 | 207,090 | 15,062 | 8 | % | |||||||
| INFRASTRUCTURE | ||||||||||||||||||
| 2Q15 | 2Q16 | Change | ||||||||||||||||
| Points of sale in Mexico | ||||||||||||||||||
| Elektra | 1,017 | 12 | % | 969 | 13 | % | (48 | ) | -5 | % | ||||||||
| Salinas y Rocha | 53 | 1 | % | 51 | 1 | % | (2 | ) | -4 | % | ||||||||
| Banco Azteca | 1,272 | 15 | % | 1,221 | 16 | % | (51 | ) | -4 | % | ||||||||
| Freestanding branches | 2,868 | 33 | % | 2,314 | 31 | % | (554 | ) | -19 | % | ||||||||
| B-Store | 263 | 3 | % | - | 0 | % | (263 | ) | -100 | % | ||||||||
| Total | 5,473 | 63 | % | 4,555 | 61 | % | (918 | ) | -17 | % | ||||||||
| Points of sale in Central and South America | ||||||||||||||||||
| Elektra | 197 | 2 | % | 193 | 3 | % | (4 | ) | -2 | % | ||||||||
| Banco Azteca | 197 | 2 | % | 193 | 3 | % | (4 | ) | -2 | % | ||||||||
| Freestanding branches | 408 | 5 | % | 343 | 5 | % | (65 | ) | -16 | % | ||||||||
| Total | 802 | 9 | % | 729 | 10 | % | (73 | ) | -9 | % | ||||||||
| Points of sale in North America | ||||||||||||||||||
| Advance America | 2,372 | 27 | % | 2,208 | 29 | % | (164 | ) | -7 | % | ||||||||
| Total | 2,372 | 27 | % | 2,208 | 29 | % | (164 | ) | -7 | % | ||||||||
| TOTAL | 8,647 | 100 | % | 7,492 | 100 | % | (1,155 | ) | -13 | % | ||||||||
| Floor space (m²) | 1,645 | 100 | % | 1,483 | 100 | % | (162 | ) | -10 | % | ||||||||
| Employees | ||||||||||||||||||
| Mexico | 51,577 | 75 | % | 47,415 | 76 | % | (4,162 | ) | -8 | % | ||||||||
| Central and South America | 10,062 | 15 | % | 8,576 | 14 | % | (1,486 | ) | -15 | % | ||||||||
| North America | 6,822 | 10 | % | 6,219 | 10 | % | (603 | ) | -9 | % | ||||||||
| Total employees | 68,461 | 100 | % | 62,210 | 100 | % | (6,251 | ) | -9 | % | ||||||||
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
