ALPEK (ALPEKA) Q4 2023 earnings summary

Executive summary

• FY23 Comparable EBITDA was $734M, down 47% YoY; free cash flow reached $408M, up 269%, and net debt fell 7% YoY to $1.729B.

• 4Q23 Comparable EBITDA was $167M, up 5% QoQ; priorities included structural cost reductions, cash generation and strengthening the balance sheet.

Financial highlights

• FY23 revenue was $7.759B, down 26% YoY; 4Q23 revenue was $1.691B, down 14% QoQ and 31% YoY.

• Reported EBITDA was $514M for FY23, down 65% YoY, and $53M in 4Q23, down 58% QoQ.

• Net loss attributable to controlling interest was $635M in 4Q23 and $636M for FY23; 4Q operating loss of $578M included a $557M non-cash CCP impairment.

• FY23 volume was 4.64M tons, down 8% YoY; capex was $277M, 38% below initial guidance.

Outlook and guidance

• Cost initiatives target $75M+ in annualized run-rate savings, including more than $40M from footprint optimization and competitiveness measures.

• Footprint optimization and improved power supply agreements take effect in 1Q24, restructuring in 2H24 and systems efficiency in 2025.

• 2024 market headwinds are expected to persist, with gradual demand and market improvement; Chinese reference margins are expected to remain low amid overcapacity.