—Operating income grows 31% to Ps.2,565 million—
—Consolidated revenue increases 11% to Ps.19,099 million,
supported by a 22% solid expansion of the commercial business—
—23% growth in consolidated deposits to Ps.101,386 million
generates solid perspectives in the financial business—
MEXICO CITY, April 21, 2015 (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 first quarter of 2015.
Consolidated first quarter results
Consolidated revenue totaled Ps.19,099 million,11% higher than the Ps.17,189 million of the same period last year. Costs and operating expenses were Ps.15,934 million, from Ps.14,576 million for the same period of 2014.
As a result, Grupo Elektra reported EBITDA of Ps.3,165 million, 21% higher than the Ps.2,613 million of the previous year's quarter; EBITDA margin was 17% this period, two percentage points higher than the previous year. Operating income grew 31% to Ps.2,565 million.
The company reported a net loss of Ps.3,280 million, from a net loss of Ps.175 million a year ago.
| 1Q 2014 | 1Q 2015 | Change | ||
| Ps. | % | |||
| Consolidated revenue | $17,189 | $19,099 | $1,910 | 11% |
| EBITDA | $2,613 | $3,165 | $551 | 21% |
| Net result | $(175) | $(3,280) | $(3,105) | -- |
| Net result per share | $(0.7) | $(14.0) | $(13.3) | -- |
| Figures in millions of pesos |
| EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. |
| As of March 31, 2014, Elektra outstanding shares were 237.3 million and as of March 31, 2015, were 234.7 million. |
Revenue
Consolidated revenue grew 11%, as a result of an increase of 22% in commercial sales, together with a 6% increase in financial revenues.
Commercial sales —of Ps.6,224 million from Ps.5,086 million last year— increased as a result of strategies that generate growing customer satisfaction through an optimal mix of merchandise on the sales floor, which is offered by a highly trained sales force under the most competitive market conditions.
Financial revenues, of Ps.12,875 million in the quarter, compared to Ps.12,103 million of previous year, increased mainly due to higher revenue from Advance America —the largest non-bank provider of cash advance services in the US.
Costs and expenses
Consolidated costs for the quarter increased 27% to Ps.8,897 million, from Ps.6,998 million from the previous year. The change is mainly due to 31% increase in financial cost —derived from the creations of reserves— and a 23% increase in commercial cost, in line with the performance of merchandise sales.
Sales, administration and promotion expenses decreased 7% to Ps.7,037 million, in the context of strategies that generated important operating efficiencies during the quarter.
EBITDA and net result
Consolidated EBITDA grew 21% to Ps.3,165 million this quarter.
Operating income was Ps.2,565 million, 31% higher than the Ps.1,960 million from the previous year.
The most significant change below EBITDA was a negative variation of Ps.4,745 million in other financial results, as a consequence of a bigger 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.3,280 million, compared to a net loss of Ps.175 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 as of March 31, 2015, was Ps.69,817 million, compared to Ps.76,828 million from the previous year. Consolidated delinquency rate was 9.6% at the end of the period.
The gross portfolio of Banco Azteca Mexico was Ps.55,281 million, compared to Ps.62,961 million a year ago. The delinquency rate of Banco Azteca Mexico at the end of the quarter was 10%. The non-performing loan portfolio is reserved 1.41 times. The average term of the credit portfolio for principal credit lines –consumer, personal loans and Tarjeta Azteca– was 52 weeks at the end of the first quarter.
The Advance America loan portfolio was Ps.3,833 million, 16% higher than the Ps.3,310 million a year ago. More dynamism in the operations of the company is expected with the successful launch of title loans in a growing number of points of sale in the U.S.
Grupo Elektra consolidated deposits grew 23%, to Ps.101,386 million, compared to Ps.82,363 million a year ago. Deposits of Banco Azteca Mexico were Ps.96,145 million, 19% higher than the Ps.80,822 million a year ago. Financial products that satisfy clients in the best way, with world class service, resulted in the increase in deposits. The higher deposit base sets a strong foundation for future financial business growth.
As of March 31, 2015, the estimated capitalization index of Banco Azteca Mexico was 16.2%. The company considers the index to be at a level that optimizes equity profitability.
Debt
Consolidated debt with cost as of March 31, 2015, was Ps.19,640 million, 12% below the Ps.22,444 million of the prior year, mainly as a consequence of debt prepayments of Ps.2,772 million for Banco Azteca Mexico this period.
Consolidated debt at the end of March 2015 was comprised of Ps.17,717 million for the commercial business, and Ps.1,922 million for the financial business. The balance of cash, cash equivalents and marketable securities for the commercial business was Ps.18,961 million at the end of the period; as a result, that division has a positive net cash balance —excluding the debt with cost amount— of Ps.1,244 million.
Expansion
Grupo Elektra currently has 6,961 points of sale, 2% more than the 6,849 from a year ago.
Grupo Elektra has 3,924 points of sale in Mexico, 2,394 in the United States, and 643 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.
Company Profile:
Grupo Elektra (www.grupoelektra.com.mx) 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 over 6,000 points of sale in Mexico, USA, Brazil, 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 Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (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 TPE (www.lenlacetpe.com.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 | ||||||
| 1Q14 | 1Q15 | Change | ||||
| Financial income | 12,103 | 70% | 12,875 | 67% | 771 | 6% |
| Commercial income | 5,086 | 30% | 6,224 | 33% | 1,139 | 22% |
| Income | 17,189 | 100% | 19,099 | 100% | 1,910 | 11% |
| Financial cost | 3,598 | 21% | 4,699 | 25% | 1,101 | 31% |
| Commercial cost | 3,400 | 20% | 4,198 | 22% | 798 | 23% |
| Costs | 6,998 | 41% | 8,897 | 47% | 1,899 | 27% |
| Gross income | 10,191 | 59% | 10,201 | 53% | 10 | 0% |
| Sales, administration and promotion expenses | 7,578 | 44% | 7,037 | 37% | (541) | -7% |
| Depreciation and amortization | 653 | 4% | 599 | 3% | (53) | -8% |
| Operating expenses | 8,230 | 48% | 7,636 | 40% | (595) | -7% |
| Operating income | 1,960 | 11% | 2,565 | 13% | 605 | 31% |
| EBITDA | 2,613 | 15% | 3,165 | 17% | 551 | 21% |
| Comprehensive financial result: | ||||||
| Interest income | 128 | 1% | 103 | 1% | (25) | -20% |
| Interest expense | (378) | -2% | (336) | -2% | 42 | 11% |
| Foreign exchange gain, net | 83 | 0% | 41 | 0% | (43) | -51% |
| Other financial results, net | (1,988) | -12% | (6,733) | -35% | (4,745) | -239% |
| (2,155) | -13% | (6,926) | -36% | (4,771) | -221% | |
| Other expense, net | (12) | 0% | (36) | 0% | (24) | -209% |
| Participation in the net income of | ||||||
| CASA and other associated companies | (37) | 0% | (130) | -1% | (94) | -256% |
| Loss before income tax | (242) | -1% | (4,527) | -24% | (4,284) | -- |
| Income tax | 116 | 1% | 1,263 | 7% | 1,147 | -- |
| Loss before discontinued operations | (126) | -1% | (3,264) | -17% | (3,138) | -- |
| Result from discontinued operations | (49) | 0% | (16) | 0% | 33 | 67% |
| Consolidated net loss | (175) | -1% | (3,280) | -17% | (3,105) | -- |
| 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 March 31, 2014 | At March 31, 2015 | |||||||||
| Cash and cash equivalents | 2,983 | 18,069 | 21,052 | 5,558 | 25,745 | 31,303 | 10,251 | 49% | ||
| Marketable financial instruments | 12,463 | 20,870 | 33,333 | 13,403 | 42,411 | 55,814 | 22,481 | 67% | ||
| Performing loan portfolio | -- | 50,277 | 50,277 | -- | 47,226 | 47,226 | (3,051) | -6% | ||
| Total past-due loans | -- | 6,194 | 6,194 | -- | 6,371 | 6,371 | 177 | 3% | ||
| Gross loan portfolio | -- | 56,471 | 56,471 | -- | 53,597 | 53,597 | (2,874) | -5% | ||
| Allowance for credit risks | -- | 8,735 | 8,735 | -- | 9,556 | 9,556 | 822 | 9% | ||
| Loan portfolio, net | -- | 47,737 | 47,737 | -- | 44,041 | 44,041 | (3,695) | -8% | ||
| Inventories | 6,139 | -- | 6,139 | 6,090 | 6,090 | (49) | -1% | |||
| Other current assets | 4,343 | 7,181 | 11,524 | 2,226 | 6,781 | 9,007 | (2,517) | -22% | ||
| Total current assets | 25,928 | 93,857 | 119,785 | 27,277 | 118,978 | 146,255 | 26,470 | 22% | ||
| Financial instruments | 10,507 | 200 | 10,708 | 11,286 | 240 | 11,526 | 818 | 8% | ||
| Performing loan portfolio | -- | 20,142 | 20,142 | 15,867 | 15,867 | (4,275) | -21% | |||
| Total past-due loans | -- | 215 | 215 | 354 | 354 | 139 | 65% | |||
| Loan portfolio | -- | 20,357 | 20,357 | -- | 16,220 | 16,220 | (4,136) | -20% | ||
| Other non-current assets | 3,400 | 987 | 4,387 | 1,603 | 919 | 2,521 | (1,866) | -43% | ||
| Investment in shares | 4,240 | -- | 4,240 | 4,173 | 4,173 | (68) | -2% | |||
| Property, furniture, equipment and investment in stores, net | 4,765 | 2,897 | 7,662 | 4,284 | 2,903 | 7,187 | (475) | -6% | ||
| Intangible assets | 623 | 6,615 | 7,239 | 556 | 7,410 | 7,966 | 727 | 10% | ||
| Other assets | 1,024 | 614 | 1,637 | 991 | 675 | 1,666 | 29 | 2% | ||
| TOTAL ASSETS | 50,488 | 125,526 | 176,014 | 50,170 | 147,344 | 197,514 | 21,500 | 12% | ||
| Demand and term deposits | 82,363 | 82,363 | 101,386 | 101,386 | 19,023 | 23% | ||||
| Creditors from repurchase agreements | 3,490 | 3,490 | 3,129 | 3,129 | (362) | -10% | ||||
| Short-term debt | 4,150 | 518 | 4,668 | 7,627 | 784 | 8,411 | 3,742 | 80% | ||
| Short-term liabilities with cost | 4,150 | 86,372 | 90,522 | 7,627 | 105,299 | 112,926 | 22,404 | 25% | ||
| Suppliers and other short-term liabilities | 8,578 | 6,637 | 15,215 | 8,703 | 6,193 | 14,896 | (319) | -2% | ||
| Short-term liabilities without cost | 8,578 | 6,637 | 15,215 | 8,703 | 6,193 | 14,896 | (319) | -2% | ||
| Total short-term liabilities | 12,728 | 93,009 | 105,737 | 16,330 | 111,492 | 127,822 | 22,085 | 21% | ||
| Long-term debt | 13,910 | 3,866 | 17,776 | 10,090 | 1,138 | 11,229 | (6,547) | -37% | ||
| Long-term liabilities with cost | 13,910 | 3,866 | 17,776 | 10,090 | 1,138 | 11,229 | (6,547) | -37% | ||
| Long-term liabilities without cost | 5,757 | 1,259 | 7,016 | 4,692 | 2,869 | 7,561 | 545 | 8% | ||
| Total long-term liabilities | 19,667 | 5,124 | 24,791 | 14,782 | 4,007 | 18,789 | (6,002) | -24% | ||
| TOTAL LIABILITIES | 32,395 | 98,133 | 130,528 | 31,112 | 115,499 | 146,612 | 16,083 | 12% | ||
| TOTAL STOCKHOLDERS' EQUITY | 18,093 | 27,393 | 45,486 | 19,058 | 31,844 | 50,902 | 5,416 | 12% | ||
| LIABILITIES + EQUITY | 50,488 | 125,526 | 176,014 | 50,170 | 147,344 | 197,514 | 21,500 | 12% | ||
| INFRASTRUCTURE | ||||||
| 1Q14 | 1Q15 | Change | ||||
| Points of sale in Mexico | ||||||
| Elektra (1) | 988 | 14% | 974 | 14% | (14) | -1% |
| Salinas y Rocha (1) | 55 | 1% | 54 | 1% | (1) | -2% |
| Freestanding branches | 2,411 | 35% | 2,600 | 37% | 189 | 8% |
| Blockbuster | 327 | 5% | 296 | 4% | (31) | -9% |
| Total | 3,781 | 55% | 3,924 | 56% | 143 | 4% |
| Points of sale in Central and South America | ||||||
| Elektra (1) | 215 | 3% | 190 | 3% | (25) | -12% |
| Freestanding branches | 407 | 6% | 453 | 7% | 46 | 11% |
| Total | 622 | 9% | 643 | 9% | 21 | 3% |
| Points of sale in North America | ||||||
| Advance America | 2,446 | 36% | 2,394 | 34% | (52) | -2% |
| Total | 2,446 | 36% | 2,394 | 34% | (52) | -2% |
| TOTAL | 6,849 | 100% | 6,961 | 100% | 112 | 2% |
| (1) Each store has a Banco Azteca branch. | ||||||
| Floor space (m²) | ||||||
| Elektra Mexico | 843,900 | 48% | 839,387 | 50% | (4,512) | -1% |
| Elektra Central and South America | 151,891 | 9% | 143,315 | 8% | (8,576) | -6% |
| Salinas y Rocha | 58,995 | 3% | 57,795 | 3% | (1,200) | -2% |
| Freestanding branches | 241,389 | 14% | 240,348 | 14% | (1,041) | 0% |
| Advance America | 335,142 | 19% | 327,978 | 19% | (7,164) | -2% |
| Blockbuster | 110,000 | 6% | 82,250 | 5% | (27,750) | -25% |
| TOTAL | 1,741,316 | 100% | 1,691,073 | 100% | (50,243) | -3% |
| Employees | ||||||
| Mexico | 67,516 | 79% | 54,730 | 75% | (12,786) | -19% |
| Central and South America | 11,327 | 13% | 10,993 | 15% | (334) | -3% |
| North America | 6,666 | 8% | 7,050 | 10% | 384 | 6% |
| Total employees | 85,509 | 100% | 72,773 | 100% | (12,736) | -15% |