Grupo Carso (GCARSOA1) Q3 2024 earnings summary

Executive summary

• Consolidated sales grew 8.3% year-over-year to MXN 49 billion, driven by higher volumes, peso depreciation, and strong industrial and materials divisions.

• Net income increased 6.9% to MXN 3 billion, while EBITDA rose 2.6% to MXN 7.2 billion, with an EBITDA margin of 14.7%.

• Zamajal hydrocarbons operation began consolidation, contributing MXN 430 million in new revenues but posting operating and net losses due to startup costs.

Financial highlights

• Operating income declined 4.2% year-over-year to MXN 5.3 billion, mainly due to lower profitability in Sanborns, Carso Energy, and Zamajal.

• EBITDA margin declined 80 bps to 14.7%, and controlling net income increased 6.9% to MXN 3 billion.

• Comprehensive financing expense increased 5.1% to MXN 701 million, reflecting higher net interest expense.

• Net debt reduced to MXN 32.6 billion from MXN 43.6 billion in 2Q24, with net debt/EBITDA at 1.1x.

Outlook and guidance

• Zamajal's Ichalkil and Pokoch fields expect up to $1 billion investment over five years, targeting 70,000–80,000 barrels/day; 2025 production expected at 30,000 barrels/day.

• Backlog in infrastructure and construction stood at MXN 21.6 billion as of September 30, 2024, down from MXN 32.8 billion a year earlier.

• Nearshoring trends are expected to continue benefiting industrial and construction divisions.

• No new government construction projects in backlog; focus remains on private sector and Pemex contracts.