Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated sales increased by 8.3% to 49 billion pesos, driven by higher volumes and favorable exchange rates.
- Grupo Carso SAB de CV (GPOVF, Financial) reported a 6.9% growth in consolidated controlling net income, reaching 3 billion pesos.
- Carso Energy's revenues increased due to exchange rate effects and natural gas transportation services.
- The industrial division saw improved performance with a significant increase in sales of construction and automotive cables.
- The company is benefiting from nearshoring trends, particularly in the automotive and construction sectors.
Negative Points
- Consolidated operating income decreased to 5.3 billion pesos from 5.6 billion, reflecting lower profitability.
- EBITDA margin declined by 80 basis points from 15.5% to 14.7%.
- Grupo Amples experienced a 39.2% reduction in EBITDA due to higher costs and operating expenses.
- The backlog for construction projects is limited to existing contracts, with no new government projects included.
- The oil operations recorded a loss of 145 million pesos, indicating challenges in this segment.
Q & A Highlights
Q: Could you give us more color on the resolution in operating profit for Grupo Sanborns and the construction division backlog?
A: One of the main cost increases in Grupo Sanborns is labor, due to rising minimum wages in Mexico. We are working on improving productivity to offset these costs. Additionally, we are finalizing changes to our credit models, which have impacted us recently. Regarding the construction division, the current backlog is based on signed projects, not including potential new government projects. We aim to participate in future government projects, but currently, our backlog consists of private business and ongoing projects.
Q: What percentage of the construction backlog do you expect to start next year?
A: In the installation division, we have short-term contracts, so the backlog doesn't fully represent potential revenues. For the infrastructure division, we expect the backlog to be around 15 billion pesos. We have opportunities with Pemex, but no confirmed projects yet. We anticipate increasing our backlog in the structures and equipment division.
Q: Could you provide more details on the increase in overdue receivables during the quarter?
A: We reduced accounts receivable mainly in construction, recovering significant amounts from government projects like the Mitla-Tehuantepec highway and Pemex. We are also increasing inventories in the retail division in preparation for the holiday season, which is crucial for retail.
Q: What are your expectations for the Ichalkil and Pokoch oil fields, and what should we expect in terms of capex in the coming quarters?
A: The total investment for the Ichalkil and Pokoch fields could reach around $1 billion over the next five years, with a production target of 150,000 barrels per day. We aim to achieve positive cash flow by the third or fourth quarter of next year. We are currently reviewing the best strategies to accelerate this process.
Q: How is nearshoring impacting your business, and what opportunities do you see from this trend?
A: We are already benefiting from nearshoring, particularly in our Condumex division, which saw a 26% sales increase this quarter. This growth is driven by demand in the automotive industry and construction cables, partly due to new plants in Mexico and increased demand from industrial parks. We see further opportunities in our industrial and construction divisions due to nearshoring.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
