Grupo Carso (GCARSOA1) Q4 2024 earnings summary

Executive summary

• Consolidated sales reached MXN 59.08 billion, up 6.6% year-over-year, driven by higher volumes, holiday season effects, and favorable exchange rates.

• Operating income rose to MXN 7.03 billion, up 9.6%, with improved profitability in Sanborns and Elementia-Fortaleza, partially offset by declines in CICSA.

• Consolidated EBITDA increased to MXN 9.29 billion, with a margin improvement to 15.7%.

• Controlling net income grew 27.1% to MXN 4.3 billion, reflecting better operating and financial results, including a significant exchange gain.

• Notable events include the US$600 million sale agreement of Giant Cement Holding and Zamajal's move to control 80% of Talos Mexico.

Financial highlights

• Grupo Condumex sales rose to MXN 12.7 billion, up 23.2%, mainly due to construction and automotive cables.

• Elementia-Fortaleza sales increased 12.3% to MXN 8.8 billion, benefiting from higher volumes and peso appreciation.

• Zamajal hydrocarbons contributed MXN 364 million in revenue; operating result was a loss of MXN 313 million, but EBITDA turned positive.

• CICSA sales were MXN 10.9 billion, but operating income and EBITDA declined 58.4% and 53.7%, respectively, due to project completions.

• Carso Energy sales improved 9.7% to MXN 959 million, with operating income and EBITDA up 10.2% and 12.5%.

Outlook and guidance

• Industrial division expects continued growth from new harnesses business and global cable customers, with confidence despite potential U.S. policy changes.

• CICSA anticipates a 9-10% sales decrease in 2025 due to fewer new government projects, but remains optimistic for future years.

• Grupo Sanborns aims for double-digit growth, focusing on sales floor efficiency and selective store openings.

• Elementia-Fortaleza targets margin improvement and capacity expansion, focusing on Mexico and Latin America.

• Carso Energy expects significant sales growth with the new Centauro del Norte pipeline, aiming for an 80% increase upon completion.

• Zamajal division to focus on development and increased production, with profitability expected post-2025; acquisition of additional Talos Mexico stake subject to regulatory approval.