Grupo Carso (GCARSOA1) Q4 2023 earnings summary

Executive summary

• Q4 2023 sales rose 0.2% YoY to Ps. 55,434 MM; FY sales increased 9.3% to Ps. 198,461 MM.

• Q4 operating income fell 46.0% and controlling net income fell 61.9%, primarily reflecting a Ps. 3,800 MM one-time valuation gain in the prior-year comparison.

• FY EBITDA increased 12.6% to Ps. 30,951 MM; excluding the one-time item, operating income rose 10.2% and EBITDA rose 30.8%.

Financial highlights

• Q4 operating income was Ps. 6,430 MM; FY operating income was Ps. 24,415 MM, down 6.0% reported and up 10.2% excluding the extraordinary item.

• Q4 EBITDA was Ps. 8,634 MM, down 13.2% YoY; margin declined to 15.6% from 18.0%. FY EBITDA rose 12.6% to Ps. 30,951 MM.

• Q4 controlling net income was Ps. 3,495 MM, down 61.9%; FY net income was Ps. 13,636 MM, down 28.5%, or down 10.6% excluding the one-time item.

• Q4 comprehensive financing cost improved to Ps. 1,355 MM from Ps. 1,591 MM; FY cost increased to Ps. 6,056 MM from Ps. 3,149 MM.

Outlook and guidance

• Samalayuca–Sásabe pipeline compression station construction finished in Dec. 2023; pre-commissioning tests began, with increased gas transport capacity expected in Q1 2024.

• A ~416-km pipeline extension to Mexicali is planned under agreements with CFE, subject to conditions precedent; CFE may take up to 15% initially and up to 49% by contract end.