Q2 2024 Alfa SAB de CV Earnings Call Transcript
Key Points
- Alfa SAB de CV (ALFFF) reported better than expected results, with double-digit EBITDA growth in the second quarter and first half of the year.
- Sigma achieved an all-time high quarterly EBITDA, marking its 13th consecutive quarter of year-on-year revenue growth.
- Alpek completed a comprehensive plan to capture $75 million in annualized savings, improving its leverage ratio to 3.3x.
- Sigma's performance was bolstered by strong consumer demand and favorable currency exchange rates, particularly in Mexico, the US, and Latin America.
- The company raised its 2024 guidance, anticipating full-year revenues of $8.85 billion and EBITDA of $1.0 billion, reflecting a 2% and 9% increase, respectively, over original projections.
- Alpek continues to face headwinds in the global petrochemical industry, with polyester margins still under pressure.
- Despite strong performance, Alfa SAB de CV (ALFFF) faces a significant discount in its stock price, with Sigma's implied value within Alfa being undervalued.
- The company needs to reduce its consolidated net debt from $3.25 billion to closer to $2.5 billion to maintain a healthy leverage level post-separation.
- There is ongoing pressure from raw material costs and currency volatility, which could impact margins in the second half of the year.
- Alpek's guidance already considers low levels of polyester margins, indicating ongoing challenges in the market.
Good day and welcome to ALFA's Second Quarter 2024 Earnings Conference Call. (Operator Instructions) As a reminder, today's conference is being recorded. Now, I would like to turn the call over to Mr. Hernan Lozano, Vice President of Investor Relations. Mr. Lozano, you may begin.
Good day, everyone, and welcome to ALFA's second quarter earnings conference call. Further details about our financial results can be found in our press release which was distributed yesterday afternoon together with a summarized presentation. Both are available on our website in the Investor Relations section.
Let me remind you that during this call, we will share forward-looking information and statements, which are based on variables and assumptions that are uncertain at this time. It is my pleasure to participate in todayâs call together with Eduardo Escalante, ALFAâs CFO; and Roberto Olivares, Sigmaâs CFO.
I will now turn the call over to Eduardo.
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