Grupo Pochteca (POCHTEC B ) Q3 2024 earnings summary

Executive summary

• Q3 sales rose 0.5% YoY to MXN 2,147m, reversing the declining trend seen in 2023 and H1 2024; sales also edged up sequentially from Q4 2023 through Q3 2024.

• Gross margin improved 350 bps YoY to 22.5%; EBITDA rose 73.5% to MXN 112m, while net loss narrowed to MXN 35m from MXN 82m.

• Banking services resumed for Pochteca Materias Primas after nearly three years on the blocked-persons list; discussions began to restructure overdue bank debt.

Financial highlights

• Q3 revenue was MXN 2,147m, up 0.5% YoY; 9M revenue fell 6.6% to MXN 6,255m.

• Q3 gross profit increased 18.9% to MXN 482m; operating income was MXN 50m versus MXN 4m in Q3 2023.

• Q3 EBITDA reached MXN 112m, up 73.5% YoY; 9M EBITDA rose 71.0% to MXN 262m.

• Q3 net loss narrowed to MXN 35m from MXN 82m; 9M net loss widened to MXN 164m from MXN 136m.

Outlook and guidance

• Management expects the net debt/EBITDA ratio to improve as EBITDA continues its 2024 upward trend.

• Management expects operating expenses as a percentage of sales to decline as sales recover.

• Management expects completion of the debt restructuring to reopen access to credit tools that have been unavailable.