Day: October 23, 2024

—Continuous dynamism in both financial and commercial businesses generates a 13% increase in consolidated revenue to Ps. 50,761 million—

—Firm performance of net credit portfolio of Banco Azteca México; increases 13%, to Ps.183,525 million—

—Growing strength in Banco Azteca México´s asset quality; NPL ratio decreases to 3.5% from 5.3% a year ago—

MEXICO CITY, Oct. 22, 2024 /PRNewswire/ — Grupo Elektra, S.A.B. de C.V. ELEKTRA, 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 third quarter 2024 results.

Third quarter results

Consolidated revenue increased 13% to Ps.50,761 million in the period, compared to Ps.45,003 million in the same quarter of the previous year. Costs and operating expenses rose 9% to Ps.43,896 million, up from Ps.40,163 million in the same quarter of 2023.

As a result, EBITDA was Ps.6,865 million, a 42% increase from Ps.4,840 million a year ago. Operating income rose to Ps.4,506 million, three times higher from Ps.1,252 million in the same period of 2023.

The company reported a net loss of Ps.574 million, compared to a loss of Ps.183 million a year ago.

Revenue

Consolidated revenue increased 13% in the period, driven by a 15% growth in financial income and a 9% rise in commercial sales.

The increase in financial income — to Ps.32,536 million, from Ps.28,306 million in the previous year — largely reflects a 13% growth in Banco Azteca México’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.18,225 million from Ps.16,696 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 7% to Ps.24,538 million from Ps.22,920 million in the previous year. The increase is driven by a 14% rise in financial costs due to a higher allowance for credit risks — resulting from an increase in credit reserves within the context of strong growth in the consolidated gross portfolio, as well as higher interest payments — and a 2% increase in commercial costs, reflecting growth in merchandise sold, partially offset by supply chain efficiencies.

Consolidated costs for the period increased at a lower rate than revenues, leading to a 19% increase in the company’s gross profit to Ps.26,223 million, from Ps.22,082 million a year ago. Gross margin increased three percentage points to 52% this quarter.

Selling, administration and promotion expenses increased 12% to Ps.19,358 million from Ps.17,243 million a year ago, largely as a result of higher operating and personnel expenses in the period, partially offset by lower advertising expenses.

EBITDA and net result

EBITDA grew 42% to Ps.6,865 million from Ps.4,840 million in the previous year. EBITDA margin increased three percentage points, to 14% in the period. The company reported operating income of Ps.4,506 million, compared to Ps.1,252 million in the same quarter of 2023.

The relevant variations below EBITDA were the following:

A decrease of Ps.1,168 million in other expenses, due to a net loss of Ps.1,165 million from the sale of commercial credit a year ago.

An increase in foreign exchange loss of Ps.332 million this quarter, as a result of net liability monetary position, together with greater exchange rate depreciation this period, compared to the previous year.

A negative variation of Ps.3,538 million in other financial results, which reflects an 11% loss this quarter in the market value of the underlying financial instruments owned by the company — and which do not imply cash flow — compared to a 1% loss a year ago.

Grupo Elektra reported a net loss of Ps.574 million, compared to a loss of Ps.183 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, the debt with cost as of September 30, 2024, was Ps.40,722 million, compared to Ps.38,630 million of the previous year, mainly as a result of the depreciation of the exchange rate of the peso against the dollar on the debt denominated in dollars, drawdown of bank credit, and issuance of Certificados Bursátiles linked to sustainability, partially offset by amortizations of international bonds.

Cash and cash equivalents were Ps.12,026 million, from Ps.10,438 million a year ago, and net debt was Ps.28,696 million, compared to Ps.28,192 million a year ago.

As of September 30, 2024, the Company’s shareholders’ equity was Ps.92,943 million, 2% higher compared to Ps.91,455 a year ago.

Consolidated Balance Sheet

Loan Portfolio and Deposits

The consolidated gross portfolio of Banco Azteca México, Purpose Financial and Banco Azteca Latinoamérica as of September 30, 2024, grew 12% to Ps.189,537 million, from Ps.168,968 million in the previous year. The consolidated non-performing loan ratio was 4.2% at the end of the period, compared to 5.7% in the previous year.

Banco Azteca México’s gross loan portfolio balance increased 13% to Ps.183,525 million, from Ps.162,844 million a year ago. The Bank’s non-performing loan ratio at the end of the period decreased to 3.5%, compared to 5.3% a year ago, in the context of robust credit origination processes and increasing collection efficiency.

Grupo Elektra’s consolidated deposits were Ps.227,495 million, 3% higher than Ps.221,545 million a year ago. Banco Azteca México’s traditional deposits were Ps.222,571 million, compared to Ps.219,639 million a year ago.

Banco Azteca México’s traditional deposit to gross portfolio ratio was 1.2 times, which allows for solid growth for the Bank, with optimal funding costs.

Banco Azteca México’s estimated capitalization ratio was 14.79%.

Infrastructure 

Grupo Elektra currently operates 6,127 points of contact from 6,218 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 4,879 contact points in Mexico, 819 in the US, and 429 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 nine-month results

Consolidated revenue for the first nine months of the year grew by 9% to Ps.143,506 million, up from Ps.131,496 million in the same period of 2023. This increase was driven by a 9% growth in both sales of the commercial business and revenues of the financial business.

EBITDA was Ps.19,554 million, 18% higher than Ps.16,634 million a year ago. EBITDA margin for the period grew one percentage point to 14%. The company reported operating profit of Ps.12,569 million, up from Ps.8,256 million a year ago.

In the first nine months of 2024, net income of Ps.502 million was recorded, compared to Ps.5,220 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.

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.

View original content:https://www.prnewswire.com/news-releases/grupo-elektra-announces-42-growth-in-ebitda-to-ps6-865-million-in-the-third-quarter-of-2024–302283856.html

SOURCE Grupo Elektra, S.A.B. de C.V.

MEXICO CITY, Oct. 22, 2024 (GLOBE NEWSWIRE) — Controladora Vuela Compañía de Aviación, S.A.B. de C.V. VLRSVOLAR (“Volaris” or “the Company”), the ultra-low-cost carrier (ULCC) serving Mexico, the United States, Central and South America, today reports its unaudited financial results for the third quarter of 2024¹.

Third Quarter 2024 Highlights
(All figures are reported in U.S. dollars and compared to 3Q 2023 unless otherwise noted)

• Net income of $37 million. Earnings per American Depositary Shares (ADS) of $32 cents.
• Total operating revenues of $813 million, a 4% decrease.
• Total revenue per available seat mile (TRASM) increased 12% to $9.38 cents.
• Available seat miles (ASMs) decreased by 14% to 8.7 billion.
• Total operating expenses of $687 million, representing 85% of total operating revenue.
• Total operating expenses per available seat mile (CASM) remained relatively flat at $7.92 cents.
• Average economic fuel cost decreased 17% to $2.64 per gallon.
• CASM ex fuel increased 10% to $5.39 cents.
• EBITDAR of $315 million, a 52% increase.
• EBITDAR margin was 38.7%, an increase of 14 percentage points.
• Total cash, cash equivalents, restricted cash, and short-term investments totaled $830 million, representing 26% of the last twelve months’ total operating revenue.
• Net debt-to-LTM EBITDAR² ratio decreased to 2.7x, compared to 2.9x in the previous quarter.

Enrique Beltranena, President & Chief Executive Officer, said: “Volaris’ third quarter results demonstrate the resilience of our business model and our focus on execution as we have successfully navigated one year of Pratt & Whitney’s engine inspections. Despite the challenges, we delivered our fourth consecutive quarter of net income and generated Total Operating Revenues of $3.2 billion U.S. dollars for the last twelve months, matching the full-year revenues of 2023. We strategically managed capacity while providing great ULCC service to our customers and reinforcing our position as the preferred airline in our core markets. Booking trends continue to show strength throughout the fall and the holiday high season, therefore we remain committed to achieving our updated full-year guidance.”

¹ The financial information, unless otherwise indicated, is presented in accordance with the International Financial Reporting Standards (IFRS).
² Includes short-term investments.

Third Quarter 2024 Consolidated Financial and Operating Highlights
(All figures are reported in U.S. dollars and compared to 3Q 2023 unless otherwise noted)

Reconciliation of CASM to Adjusted CASM ex fuel:

Third Quarter 2024
(All figures are reported in U.S. dollars and compared to 3Q 2023 unless otherwise noted)

Total operating revenues amounted to $813 million in the quarter, driven by an increase in base fares and ancillary revenue per passenger. This represents only a 4.1% decrease, despite a double-digit reduction in total capacity resulting from aircraft-on-ground (AOGs) due to Pratt & Whitney’s (P&W) engine inspections.

Total capacity, in terms of available seat miles (ASMs), was 8.7 billion, representing a 14.4% reduction.

Booked passengers totaled 7.6 million, a 12.4% decrease. Mexican domestic booked passengers decreased 16.0%, while international booked passengers remained practically unchanged year-over-year.

The load factor for the quarter reached 87.4%, representing an increase of 1.0 percentage point.

TRASM rose 12.0% to $9.38 cents, and total operating revenue per passenger stood at $107, representing a 9.4% increase.

The average base fare per passenger stood at $53, a 9.3% increase. The total ancillary revenue per passenger was $54, reflecting a 9.6% improvement. Ancillary revenue accounted for 50.4% of total operating revenue.

Total operating expenses were $687 million, representing 84.5% of total operating revenue.

CASM totaled $7.92 cents, representing a 0.8% decrease.

The average economic fuel cost decreased by 16.6% to $2.64 per gallon.

CASM ex fuel increased 9.9% to $5.39 cents, mainly due to reduced operating leverage as a result of the AOGs caused by the P&W engine inspections, with an average of 34 aircraft-on-ground during the quarter.

Comprehensive financing result represented an expense of $46 million, compared to a $73 million expense in the same period of 2023.

Income tax expense was $43 million, compared to a $5 million expense registered in the third quarter of 2023.

Net income in the quarter was $37 million, with an earnings per ADS of $32 cents, compared to a $39 million net loss in the same period of 2023.

EBITDAR for the quarter was $315 million, a 52.2% improvement, primarily driven by solid unit revenues, strict cost control, and more favorable jet fuel prices. EBITDAR margin stood at 38.7%, up by 14.3 percentage points.

Balance Sheet, Liquidity, and Capital Allocation

For the quarter, net cash flow provided by operating activities was $233 million. Net cash flow used in investing and financing activities was $149 million and $54 million, respectively.

As of September 30, 2024, cash, cash equivalents, restricted cash, and short-term investments were $830 million, representing 25.9% of the last twelve months’ total operating revenue.

The financial debt amounted to $740 million, an increase of 30.5% year-over-year, due to predelivery payments related to 2026 aircraft deliveries and spare engine financing. Total lease liabilities stood at $2,986 million, an increase of 5.7% due to the increase in the total fleet.

Net debt-to-LTM EBITDAR⁶ ratio stood at 2.7x, compared to 2.9x in the previous quarter and 3.5x in the same period of 2023.

The average exchange rate for the period was Ps.18.92 per U.S. dollar and Ps.19.63 per U.S. dollar at the end of the third quarter, reflecting depreciations of 10.9% and 11.4% of the Mexican peso, respectively.

⁶ Includes short-term investments.

2024 Guidance

For the fourth quarter of 2024, the Company expects:

^{(1) For convenience purposes, actual reported figures for 4Q’23 are included.}

For the full year 2024, the Company expects:

^{(2) CAPEX net of financed fleet predelivery payments.}

The fourth quarter and full year 2024 outlook presented above includes the compensation that Volaris expects to receive for the projected grounded aircraft resulting from the GTF engine inspections, in accordance with the Company’s agreement with Pratt & Whitney.

The Company’s outlook is subject to unforeseen disruptions, macroeconomic factors, or other negative impacts that may affect its business and is based on several assumptions, including the foregoing, which are subject to change and may be outside the control of the Company and its management. The Company’s expectations may change if actual results vary from these assumptions. There can be no assurances that Volaris will achieve these results.

Fleet

During the third quarter, Volaris added one A320neo aircraft to its fleet, bringing the total number of aircraft to 137. At the end of the quarter, Volaris’ fleet had an average age of 6.3 years and an average seating capacity of 197 passengers per aircraft. Of the total fleet, 60% of the aircraft are New Engine Option (NEO) models.

Investors are urged to carefully read the Company’s periodic reports filed with or provided to the Securities and Exchange Commission, for additional information regarding the Company.

Investor Relations Contact
Ricardo Martínez / ir@volaris.com

Media Contact
Israel Álvarez / ialvarez@gcya.net

Conference Call Details

About Volaris

*Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (“Volaris” or “the Company”) VLRSVOLAR is an ultra-low-cost carrier, with point-to-point operations, serving Mexico, the United States, Central and South America. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since the beginning of operations in March 2006, Volaris has increased its routes from 5 to more than 220 and its fleet from 4 to 138 aircraft. Volaris offers more than 450 daily flight segments on routes that connect 44 cities in Mexico and 29 cities in the United States, Central and South America, with one of the youngest fleets in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business and leisure travelers in Mexico, the United States, Central, and South America. Volaris has received the ESR Award for Social Corporate Responsibility for fifteen consecutive years. For more information, please visit ir.volaris.com. Volaris routinely posts information that may be important to investors on its investor relations website. The Company encourages investors and potential investors to consult the Volaris website regularly for important information about Volaris.

Forward-Looking Statements

Statements in this release contain various forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as amended, which represent the Company’s expectations, beliefs, or projections concerning future events and financial trends affecting the financial condition of our business. When used in this release, the words “expects,” “intends,” “estimates,” “predicts,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “potential,” “outlook,” “may,” “continue,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements describing the Company’s objectives, plans or goals, or actions the Company may take in the future are forward-looking. Forward-looking statements include, without limitation, statements regarding the Company’s outlook, the expectation of receiving certain compensation in connection with the GTF engine removals, and the anticipated execution of its business plan and focus on its priorities. Forward-looking statements should not be read as a guarantee or assurance of future performance or results. They will not necessarily be accurate indications of the times at or by which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time concerning future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements are subject to several factors that could cause the Company’s actual results to differ materially from the Company’s expectations, including the competitive environment in the airline industry, the Company’s ability to keep costs low; changes in fuel costs, the impact of worldwide economic conditions on customer travel behavior; the Company’s ability to generate non-ticket revenue; and government regulation. The Company’s US Securities and Exchange Commission filings contain additional information concerning these and other factors. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this release. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Supplemental Information on Non-IFRS Measures

We evaluate our financial performance by using various financial measures that are not performance measures under International Financial Reporting Standards (“non-IFRS measures”). These non-IFRS measures include CASM, CASM ex fuel, Adjusted CASM ex fuel, EBITDAR, Net debt-to-LTM EBITDAR, Total cash, cash equivalents, restricted cash, and short-term investments. We define CASM as total operating expenses by available seat mile. We define CASM ex fuel as total operating expenses by available seat mile, excluding fuel expense. We define Adjusted CASM ex fuel as total operating expenses by available seat mile, excluding fuel expense, aircraft and engine variable lease expenses and sale and lease back gains. We define EBITDAR as earnings before interest, income tax, depreciation and amortization, depreciation of right of use assets and aircraft and engine variable lease expenses. We define Net debt-to-LTM EBITDAR as Net debt divided by LTM EBITDAR. We define Total cash, cash equivalents, restricted cash, and short-term investments as the sum of cash, cash equivalents, restricted cash, and short-term investments.

These non-IFRS measures are provided as supplemental information to the financial information presented in this release that is calculated and presented in accordance with International Financial Reporting Standards (“IFRS”) because we believe that they, in conjunction with the IFRS financial information, provide useful information to management’s, analysts and investors overall understanding of our operating performance.

Because non-IFRS measures are not calculated in accordance with IFRS, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related IFRS measures presented in this release and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in the method of calculation and the items being adjusted.

We encourage investors to review our financial statements and other filings with the Securities and Exchange Commission in their entirety for additional information regarding the Company and not to rely on any single financial measure.