Grupo Pochteca (POCHTEC B ) Q1 2023 earnings summary

Executive summary

• Q1 2023 sales fell 5.9% YoY to MXN 2,382m; gross margin contracted 360 bps and EBITDA declined 75.5% to MXN 54m.

• Net loss was MXN 3m versus net income of MXN 126m in Q1 2022, reflecting weaker gross profit, higher financing costs and inflationary effects in Argentina.

Financial highlights

• Gross profit fell 21.8% YoY to MXN 423m; gross margin was 17.8%, down from 21.4%.

• Operating loss was MXN 0.4m versus operating income of MXN 175m; operating margin was 0.0% versus 6.9%.

• EBITDA declined 75.5% YoY to MXN 54m; EBITDA margin was 2.3%, down from 8.7%.

• Net financial expenses increased 28.1% YoY to MXN 60m; the foreign-exchange gain rose 65.3% to MXN 49m.

Outlook and guidance

• Margin recovery is expected as higher-cost inventories clear and recent commodity-price stabilization holds; steadier local currencies versus the US dollar could ease margin pressure.

• Management expressed confidence in a positive outlook as investments in commercial teams and digital transformation improve sales volume, operating efficiency and margins.