-Robust performance of both financial and commercial businesses generates a 9% increase in consolidated revenue, to Ps.48,183 million-
-Operating profit increases 23% in the period, to Ps.3,996 million-
-Increasing quality of Banco Azteca Mexico's credit portfolio; delinquency rate drops to 3.2%, from 5.2% a year ago-
MEXICO CITY, July 24, 2024 /PRNewswire/ -- 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, today announced second quarter 2024 results.
Second quarter results
Consolidated revenue increased 9% to Ps.48,183 million in the period, compared to Ps.44,274 million in the same quarter of the previous year. Costs and operating expenses rose 8% to Ps.41,857 million, up from Ps.38,638 million in the same quarter of 2023.
As a result, EBITDA was Ps.6,326 million, reflecting a 12% increase from Ps.5,636 million a year ago. Operating income rose to Ps.3,996 million, marking a 23% increase from Ps.3,237 million in the same period of 2023.
The company reported a net loss of Ps.644 million, compared to a profit of Ps.4,944 million a year ago.
2Q 2023 | 2Q 2024 | Change | ||
Ps. | % | |||
Consolidated revenue | $44,274 | $48,183 | $3,909 | 9 % |
EBITDA | $5,636 | $6,326 | $690 | 12 % |
Operating profit | $3,237 | $3,996 | $759 | 23 % |
Net result | $4,944 | $(644) | $(5,588) | ---- |
Net result per share | $22.36 | $(2.92) | $(25.28) | ---- |
Figures in millions of pesos. | ||||
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | ||||
As of June 30, 2024, Elektra* outstanding shares were 220.3 million and as of June 30, 2023, were 221.1 million. | ||||
Revenue
Consolidated revenue increased 9% in the period, driven by a 9% growth in financial income and an 8% rise in commercial sales.
The increase in financial income - to Ps.29,242 million, from Ps.26,806 million in the previous year - largely reflects an 8% growth in Banco Azteca Mexico's income. This growth aligns with the ongoing expansion of the gross credit portfolio, contributing to the wellbeing of millions of families and fostering business development.
The increase in the commercial business revenue to Ps.18,941 million from Ps.17,469 million a year ago is largely driven by growth in motorcycle sales, which enhance business productivity and mobility for millions; telephony, which facilitates efficient connectivity for a growing number of users; and white goods, which improve the quality of life of an increasing number of families."
Costs and expenses
Consolidated costs for the quarter increased 4% to Ps.22,923 million from Ps.22,081 million in the previous year. This increase is driven by a 5% rise in commercial costs, reflecting higher merchandise sales, partially offset by lower costs in imported merchandise, and a 3% increase in financial costs due to higher interest payments. These increased financial costs were partially offset by a lower allowance for credit risks, in the context of improved quality in the consolidated credit portfolio.
Consolidated costs for the period increased at a lower rate than revenues, resulting in a 14% increase in the company's gross profit to Ps.25,260 million from Ps.22,193 million a year ago. The gross margin increased by two percentage points to 52% this quarter.
Selling, administration and promotion expenses increased 14% to Ps.18,934 million from Ps.16,557 million a year ago, largely as a result of higher operating expenses, advertising and personnel expenses in the period.
EBITDA and net result
EBITDA grew 12% to Ps.6,326 million from Ps.5,636 million in the previous year. The company reported operating income of Ps.3,996 million, compared to Ps.3,237 million in the same quarter of 2023.
Below EBITDA, there was a foreign exchange loss of Ps.664 million this quarter, compared to a gain of Ps.72 million a year ago. This loss resulted from the effect of exchange rate depreciation on the company's net monetary position this period, compared to appreciation in the previous year.
Negative variation of Ps.7,268 million in other financial results, which reflects an 8% loss this quarter in the market value of the underlying financial instruments owned by the company - and which does not imply cash flow - compared to a 13% gain in the previous year.
Consistent with the quarterly results, the tax provision for the period decreased by Ps.2,352 million.
Grupo Elektra reported a net loss of Ps.644 million, compared to a profit of Ps.4,944 million a year ago.
Unconsolidated balance sheet
A proforma balance sheet exercise of Grupo Elektra is presented, which allows knowing the non-consolidated financial situation, excluding the net assets of the financial business, whose investment is valued in this case under the participation method.
This presentation shows the debt of the company without considering Banco Azteca's immediate and term deposits, which do not constitute debt with cost for Grupo Elektra. Also, the pro forma balance sheet does not include the bank's gross loan portfolio.
This provides greater clarity about the different businesses that make up the company and allows financial market participants to make estimates of the value of the company, considering only the relevant debt for said calculations.
Consistent with this, debt with cost as of June 30, 2024, was Ps.38,707 million, compared to Ps.38,277 million of the previous year.
Cash and cash equivalents were Ps.12,109 million, from Ps.11,357 million a year ago, and net debt was Ps.26,598 million, compared to Ps.26,920 million a year ago.
As of June 30, 2024, the Company's shareholders' equity was Ps.92,131 million, and the ratio of shareholders' equity to total liabilities was 1.06 times.
As of June 30 | As of June 30 | Change | ||||||
Ps. | % | |||||||
Cash and cash equivalents | $11,357 | $12,109 | 751 | 7 % | ||||
Marketable financial instruments | 26,995 | 26,832 | (163) | (1 %) | ||||
Inventories | 16,688 | 17,089 | 401 | 2 % | ||||
Accounts receivables | 47,356 | 49,616 | 2,261 | 5 % | ||||
Other current assets | 3,845 | 3,620 | (225) | (6 %) | ||||
Investments in shares | 40,704 | 42,890 | 2,186 | 5 % | ||||
Fixed assets | 10,074 | 8,542 | (1,532) | (15 %) | ||||
Right of use assets | 12,824 | 12,080 | (744) | (6 %) | ||||
Other assets | 2,454 | 5,933 | 3,479 | 142 % | ||||
Total assets | $172,297 | $178,711 | $6,414 | 4 % | ||||
Short-term debt | $8,580 | $10,022 | 1,441 | 17 % | ||||
Suppliers | 7,509 | 9,971 | 2,462 | 33 % | ||||
Other short-term liabilities | 18,506 | 21,460 | 2,954 | 16 % | ||||
Long-term debt | 29,697 | 28,685 | (1,013) | (3 %) | ||||
Other long-term debt | 16,805 | 16,443 | (362) | (2 %) | ||||
Total liabilities | $81,098 | $86,580 | $5,482 | 7 % | ||||
Stakeholder's equity | $91,199 | $92,131 | $932 | 1 % | ||||
Liabilities and equity | $172,297 | $178,711 | $6,414 | 4 % | ||||
Figures in millions of pesos | ||||||||
Consolidated Balance Sheet
Loan Portfolio and Deposits
The consolidated gross portfolio of Banco Azteca Mexico, Purpose Financial and Banco Azteca Latinoamerica as of June 30, 2024, grew 7% to Ps.180,327 million, from Ps.168,443 million in the previous year. The consolidated non-performing loan ratio was 3.8% at the end of the period, compared to 5.6% in the previous year.
Banco Azteca Mexico's gross loan portfolio balance increased 6% to Ps.173,266 million, from Ps.163,398 million a year ago. The Bank's non-performing loan ratio at the end of the period decreased two percentage points to 3.2%, compared to 5.2% a year ago, in the context of robust credit origination processes and increasing collection efficiency.
Grupo Elektra's consolidated deposits were Ps.228,782 million, 2% higher than Ps.224,588 million a year ago. Banco Azteca Mexico's traditional deposits were Ps.224,808 million, compared to Ps.224,264 million a year ago.
Banco Azteca Mexico's traditional deposit ratio to gross portfolio was 1.3 times, which allows for solid growth for the Bank, with optimal funding costs.
The Bank's liquidity coverage ratio at the end of the quarter - countable liquid assets / total net cash outflow - was 928%, an outstanding figure in the Mexican banking sector.
Banco Azteca Mexico's capitalization ratio was 14.85%.
Infrastructure
Grupo Elektra currently operates 6,123 points of contact from 6,260 units from the previous year. This decrease is due to strategies aimed at maximizing the profitability of the company's points of contact.
At the end of the period, Grupo Elektra had 4,887 contact points in Mexico, 827 in the US, and 409 in Central America. This extensive distribution network ensures proximity to customers and fosters close attention, contributing to the company's superior market positioning in the countries it operates in.
Consolidated six-month results
Consolidated revenue for the first six months of the year grew by 7% to Ps. 92,745 million, up from Ps. 86,494 million in the same period of 2023. This increase was driven by a 9% growth in sales of the commercial business and a 6% rise in revenues of the financial business.
EBITDA was Ps.12,689 million, compared to Ps.11,794 million a year ago. The company reported operating income of Ps.8,063 million, from Ps.7,004 million a year ago.
In the first six months of 2024, net income of Ps.1,077 million was recorded, compared to Ps.5,403 million a year ago. The change reflects a loss in the market value of the underlying financial instruments owned by the company -which does not imply cash flow- compared to the gain of the previous year.
6M 2023 | 6M 2024 | Change | ||
Ps. | % | |||
Consolidated revenue | $86,494 | $92,745 | $6,252 | 7 % |
EBITDA | $11,794 | $12,689 | $895 | 8 % |
Operating profit | $7,004 | $8,063 | $1,059 | 15 % |
Net result | $5,403 | $1,077 | $(4,326) | ---- |
Net result per share | $24.43 | $4.89 | $(19.55) | ---- |
Figures in millions of pesos. | ||||
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. | ||||
As of June 30, 2024, Elektra* outstanding shares were 220.3 million and as of June 30, 2023, were 221.1 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 more than 6,000 points of contact in Mexico, the United States, Guatemala, Honduras, and Panama.
Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating economic value through market innovation and goods and services that improve standards of living; social value to improve community well-being; and environmental value by reducing the negative impact of its business activities. 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. These companies include TV Azteca (www.TVazteca.com; www.irtvazteca.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Purpose Financial (havepurpose.com), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx), Punto Casa de Bolsa (www.puntocasadebolsa.mx), Total Play (irtotalplay.mx; www.totalplay.com.mx) and Total Play Empresarial (totalplayempresarial.com.mx). TV Azteca and Grupo Elektra trade shares on the Mexican Stock Market and in Spain's ' Latibex market. Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. The group of companies shares 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 concepts about the future that involve risks and uncertainty that may cause actual results to differ materially from those projected. Other risks that may affect Grupo Elektra and its subsidiaries are presented in documents sent to the securities authorities.
Investor Relations: | |||
Bruno Rangel Grupo Salinas Tel. +52 (55) 1720-9167 [email protected] | Rolando Villarreal Grupo Elektra, S.A.B. de C.V. Tel. +52 (55) 1720-9167 [email protected] | ||
Press Relations: | |||
Luciano Pascoe | |||
GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||||
CONSOLIDATED INCOME STATEMENTS | ||||||||||
MILLIONS OF MEXICAN PESOS | ||||||||||
2Q23 | 2Q24 | Change | ||||||||
Financial income | 26,806 | 61 % | 29,242 | 61 % | 2,436 | 9 % | ||||
Commercial income | 17,469 | 39 % | 18,941 | 39 % | 1,473 | 8 % | ||||
Income | 44,274 | 100 % | 48,183 | 100 % | 3,909 | 9 % | ||||
Financial cost | 9,190 | 21 % | 9,425 | 20 % | 235 | 3 % | ||||
Commercial cost | 12,891 | 29 % | 13,497 | 28 % | 607 | 5 % | ||||
Costs | 22,081 | 50 % | 22,923 | 48 % | 842 | 4 % | ||||
Gross income | 22,193 | 50 % | 25,260 | 52 % | 3,067 | 14 % | ||||
Sales, administration and promotion expenses | 16,557 | 37 % | 18,934 | 39 % | 2,376 | 14 % | ||||
EBITDA | 5,636 | 13 % | 6,326 | 13 % | 690 | 12 % | ||||
Depreciation and amortization | 2,394 | 5 % | 2,333 | 5 % | (61) | -3 % | ||||
Other expense (income), net | 5 | 0 % | (3) | 0 % | (8) | ---- | ||||
Operating income | 3,237 | 7 % | 3,996 | 8 % | 759 | 23 % | ||||
Comprehensive financial result: | ||||||||||
Interest income | 514 | 1 % | 479 | 1 % | (35) | -7 % | ||||
Interest expense | (1,443) | -3 % | (1,442) | -3 % | 1 | 0 % | ||||
Foreign exchange gain (loss), net | 72 | 0 % | (664) | -1 % | (736) | ---- | ||||
Other financial results, net | 4,303 | 10 % | (2,966) | -6 % | (7,268) | ---- | ||||
3,446 | 8 % | (4,593) | -10 % | (8,038) | ---- | |||||
Participation in the net income of | ||||||||||
CASA and other associated companies | 348 | 1 % | (306) | -1 % | (654) | ---- | ||||
Income (loss) before income tax | 7,031 | 16 % | (902) | -2 % | (7,933) | ---- | ||||
Income tax | (2,092) | -5 % | 259 | 1 % | 2,352 | ---- | ||||
Income (loss) before discontinued operations | 4,939 | 11 % | (642) | -1 % | (5,581) | ---- | ||||
Result from discontinued operations | 5 | 0 % | (1) | 0 % | (7) | ---- | ||||
Consolidated net income (loss) | 4,944 | 11 % | (644) | -1 % | (5,588) | ---- | ||||
GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||||
CONSOLIDATED INCOME STATEMENTS | ||||||||||
MILLIONS OF MEXICAN PESOS | ||||||||||
6M23 | 6M24 | Change | ||||||||
Financial income | 53,505 | 62 % | 56,768 | 61 % | 3,263 | 6 % | ||||
Commercial income | 32,988 | 38 % | 35,977 | 39 % | 2,989 | 9 % | ||||
Income | 86,494 | 100 % | 92,745 | 100 % | 6,252 | 7 % | ||||
Financial cost | 17,999 | 21 % | 18,805 | 20 % | 807 | 4 % | ||||
Commercial cost | 23,986 | 28 % | 25,652 | 28 % | 1,666 | 7 % | ||||
Costs | 41,985 | 49 % | 44,457 | 48 % | 2,473 | 6 % | ||||
Gross income | 44,509 | 51 % | 48,288 | 52 % | 3,779 | 8 % | ||||
Sales, administration and promotion expenses | 32,715 | 38 % | 35,599 | 38 % | 2,884 | 9 % | ||||
EBITDA | 11,794 | 14 % | 12,689 | 14 % | 895 | 8 % | ||||
Depreciation and amortization | 4,784 | 6 % | 4,641 | 5 % | (143) | -3 % | ||||
Other expense (income), net | 5 | 0 % | (15) | 0 % | (20) | ---- | ||||
Operating income | 7,004 | 8 % | 8,063 | 9 % | 1,059 | 15 % | ||||
Comprehensive financial result: | ||||||||||
Interest income | 891 | 1 % | 925 | 1 % | 34 | 4 % | ||||
Interest expense | (2,913) | -3 % | (2,903) | -3 % | 11 | 0 % | ||||
Foreign exchange gain (loss), net | 508 | 1 % | (634) | -1 % | (1,142) | ---- | ||||
Other financial results, net | 1,765 | 2 % | (3,637) | -4 % | (5,402) | ---- | ||||
250 | 0 % | (6,249) | -7 % | (6,499) | ---- | |||||
Participation in the net income of | ||||||||||
CASA and other associated companies | 404 | 0 % | (226) | 0 % | (630) | ---- | ||||
Income before income tax | 7,659 | 9 % | 1,589 | 2 % | (6,070) | -79 % | ||||
Income tax | (2,261) | -3 % | (510) | -1 % | 1,751 | 77 % | ||||
Income before discontinued operations | 5,398 | 6 % | 1,079 | 1 % | (4,319) | -80 % | ||||
Result from discontinued operations | 5 | 0 % | (2) | 0 % | (7) | ---- | ||||
Consolidated net income | 5,403 | 6 % | 1,077 | 1 % | (4,326) | -80 % | ||||
GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||||
CONSOLIDATED BALANCE SHEET | ||||||||||
MILLIONS OF MEXICAN PESOS | ||||||||||
Commercial | Financial | Grupo | Commercial | Financial | Grupo | Change | ||||
At June 30, 2023 | At June 30, 2024 | |||||||||
Cash and cash equivalents | 11,357 | 29,331 | 40,688 | 12,109 | 30,499 | 42,608 | 1,920 | 5 % | ||
Marketable financial instruments | 4,916 | 90,812 | 95,728 | 3,613 | 97,458 | 101,071 | 5,343 | 6 % | ||
Performing loan portfolio | - | 86,217 | 86,217 | - | 96,204 | 96,204 | 9,987 | 12 % | ||
Total past-due loans | - | 7,237 | 7,237 | - | 4,985 | 4,985 | (2,252) | -31 % | ||
Gross loan portfolio | - | 93,454 | 93,454 | - | 101,189 | 101,189 | 7,735 | 8 % | ||
Allowance for credit risks | - | 14,748 | 14,748 | - | 15,147 | 15,147 | 399 | 3 % | ||
Loan portfolio, net | - | 78,706 | 78,706 | - | 86,042 | 86,042 | 7,336 | 9 % | ||
Inventories | 16,688 | - | 16,688 | 17,089 | - | 17,089 | 401 | 2 % | ||
Other current assets | 18,238 | 14,067 | 32,305 | 22,362 | 12,294 | 34,656 | 2,351 | 7 % | ||
Total current assets | 51,200 | 212,916 | 264,115 | 55,173 | 226,294 | 281,467 | 17,352 | 7 % | ||
Financial instruments | 22,078 | 3 | 22,081 | 23,219 | 2 | 23,221 | 1,140 | 5 % | ||
Performing loan portfolio | - | 72,779 | 72,779 | - | 77,283 | 77,283 | 4,504 | 6 % | ||
Total past-due loans | - | 2,210 | 2,210 | - | 1,855 | 1,855 | (355) | -16 % | ||
Gross loan portfolio | - | 74,989 | 74,989 | - | 79,138 | 79,138 | 4,149 | 6 % | ||
Allowance for credit risks | - | 5,534 | 5,534 | - | 5,335 | 5,335 | (199) | -4 % | ||
Loan portfolio | - | 69,455 | 69,455 | - | 73,803 | 73,803 | 4,348 | 6 % | ||
Other non-current assets | 21,352 | 471 | 21,824 | 18,619 | 281 | 18,900 | (2,924) | -13 % | ||
Investment in shares | 2,395 | - | 2,395 | 2,126 | 12 | 2,138 | (257) | -11 % | ||
Property, furniture, equipment and | ||||||||||
investment in stores, net | 10,074 | 10,802 | 20,876 | 8,542 | 10,379 | 18,921 | (1,955) | -9 % | ||
Intangible assets | 779 | 7,979 | 8,759 | 699 | 7,833 | 8,532 | (227) | -3 % | ||
Right of use asset | 12,655 | 2,052 | 14,707 | 11,924 | 2,001 | 13,925 | (781) | -5 % | ||
Other assets | 1,675 | 7,786 | 9,461 | 5,233 | 9,477 | 14,710 | 5,249 | ---- | ||
TOTAL ASSETS | 122,208 | 311,464 | 433,672 | 125,537 | 330,080 | 455,617 | 21,945 | 5 % | ||
Demand and term deposits | - | 224,588 | 224,588 | - | 228,782 | 228,782 | 4,194 | 2 % | ||
Creditors from repurchase agreements | - | 15,412 | 15,412 | - | 28,253 | 28,253 | 12,841 | 83 % | ||
Short-term debt | 8,475 | 138 | 8,613 | 9,460 | 37 | 9,497 | 884 | 10 % | ||
Leasing | 2,315 | 840 | 3,155 | 2,055 | 811 | 2,866 | (289) | -9 % | ||
Short-term liabilities with cost | 10,789 | 240,978 | 251,768 | 11,515 | 257,883 | 269,398 | 17,630 | 7 % | ||
Suppliers and other short-term liabilities | 23,479 | 20,992 | 44,470 | 29,163 | 19,956 | 49,119 | 4,649 | 10 % | ||
Short-term liabilities without cost | 23,479 | 20,992 | 44,470 | 29,163 | 19,956 | 49,119 | 4,649 | 10 % | ||
Total short-term liabilities | 34,268 | 261,970 | 296,238 | 40,678 | 277,839 | 318,517 | 22,279 | 8 % | ||
Long-term debt | 27,027 | 0 | 27,027 | 25,813 | 0 | 25,813 | (1,214) | -4 % | ||
Leasing | 11,470 | 1,302 | 12,772 | 11,259 | 1,235 | 12,494 | (278) | -2 % | ||
Long-term liabilities with cost | 38,497 | 1,302 | 39,799 | 37,072 | 1,235 | 38,307 | (1,492) | -4 % | ||
Long-term liabilities without cost | 5,335 | 1,101 | 6,436 | 5,184 | 1,478 | 6,662 | 226 | 4 % | ||
Total long-term liabilities | 43,832 | 2,403 | 46,235 | 42,256 | 2,713 | 44,969 | (1,266) | -3 % | ||
TOTAL LIABILITIES | 78,100 | 264,373 | 342,473 | 82,934 | 280,552 | 363,486 | 21,013 | 6 % | ||
TOTAL STOCKHOLDERS' EQUITY | 44,108 | 47,091 | 91,199 | 42,603 | 49,529 | 92,131 | 932 | 1 % | ||
LIABILITIES + EQUITY | 122,208 | 311,464 | 433,672 | 125,537 | 330,080 | 455,617 | 21,945 | 5 % | ||
INFRASTRUCTURE | ||||||||
2Q23 | 2Q24 | Change | ||||||
Points of sale in Mexico | ||||||||
Elektra | 1,225 | 20 % | 1,227 | 20 % | 2 | 0 % | ||
Salinas y Rocha | 33 | 1 % | 32 | 1 % | (1) | -3 % | ||
Banco Azteca | 1,926 | 31 % | 1,921 | 31 % | (5) | 0 % | ||
Freestanding branches | 1,762 | 28 % | 1,707 | 28 % | (55) | -3 % | ||
Total | 4,946 | 79 % | 4,887 | 80 % | (59) | -1 % | ||
Points of sale in Central America | ||||||||
Elektra | 120 | 2 % | 120 | 2 % | - | 0 % | ||
Banco Azteca | 228 | 4 % | 225 | 4 % | (3) | -1 % | ||
Freestanding branches | 64 | 1 % | 64 | 1 % | - | 0 % | ||
Total | 412 | 7 % | 409 | 7 % | (3) | -1 % | ||
Points of sale in North America | ||||||||
Purpose Financial | 902 | 14 % | 827 | 14 % | (75) | -8 % | ||
Total | 902 | 14 % | 827 | 14 % | (75) | -8 % | ||
TOTAL | 6,260 | 100 % | 6,123 | 100 % | (137) | -2 % | ||
Floor space (m²) | 1,530 | 100 % | 1,740 | 100 % | 210 | 14 % | ||
Employees | ||||||||
Mexico | 62,600 | 88 % | 61,334 | 88 % | (1,266) | -2 % | ||
Central and South America | 5,972 | 8 % | 6,129 | 9 % | 157 | 3 % | ||
North America | 2,681 | 4 % | 2,493 | 4 % | (188) | -7 % | ||
Total employees | 71,253 | 100 % | 69,956 | 100 % | (1,297) | -2 % | ||
SOURCE Grupo Elektra, S.A.B. de C.V.
