Grupo Carso (GCARSOA1) Q2 2024 earnings summary

Executive summary

• Consolidated sales totaled MXN 48.29 billion, stable year-over-year, with peso appreciation impacting dollar-based revenues.

• Net income rose 34.5% to MXN 4.646 billion, driven by higher financial income despite lower operating results.

• Operating income fell 7.9% to MXN 5.746 billion, mainly due to currency effects.

• EBITDA decreased 4.0% to MXN 7.363 billion, with margin down to 15.2% from 15.9%.

• Major investments and acquisitions in the energy sector, including a $1.2B+ service agreement with Pemex and the acquisition of Petrobal Operaciones Upstream.

Financial highlights

• Net income for 2Q24: MXN 4.646 billion, up 34.5% year-over-year.

• EBITDA: MXN 7.363 billion, down 4.0% year-over-year; margin at 15.2%.

• Operating income: MXN 5.746 billion, down 7.9% year-over-year.

• Net debt increased to MXN 43.565 billion, up from MXN 29.403 billion at year-end 2023.

• Net debt to 12-month EBITDA ratio rose to 1.45x from 0.96x a year ago.

Outlook and guidance

• First commercial production from the Lakach field expected in about 2.5 years.

• Cement demand in the US remains stable; peso appreciation continues to impact foreign revenues.

• Backlog in infrastructure and construction at MXN 27.773 billion as of June 30, 2024.

• Expectation for Grupo Sanborns to recover to 8-9% margin by year-end as credit portfolio issues resolve.

• Carso Energy revenues expected to stabilize in Q3, with full recognition of new compressor station tariff.