Kuo (KUO B) Q4 2023 earnings summary

Executive summary

• 4Q23 revenue was MXN 13,318 million, down 12.7% YoY, while EBITDA rose 2.6% to MXN 1,210 million; lower Chemical and Pork Meat sales weighed on revenue.

• FY23 revenue fell 14.2% to MXN 54,886 million, EBITDA declined 29.2% to MXN 4,278 million, and net majority income decreased 60.7% to MXN 736 million.

Financial highlights

• 4Q23 operating profit reached MXN 598 million, up 20.9% YoY; operating margin was 4.5%, up 1.3 pp, and EBITDA margin was 9.1%, up 1.4 pp.

• 4Q23 net majority income rose 43.8% to MXN 243 million, supported by lower costs and expenses and a lower tax provision.

• FY23 operating profit was MXN 1,674 million, down 49.6%; EBITDA margin declined 1.7 pp to 7.8%.

• Exports totaled MXN 6,646 million, or 50% of 4Q23 revenue.

Segment performance

• Consumer: 4Q23 revenue fell 8.9% to MXN 7,160 million; EBITDA increased 12.9% to MXN 651 million on Pork Meat raw-material cost relief and operating efficiencies.

• Chemical: 4Q23 revenue declined 30.3% to MXN 2,509 million and EBITDA fell 57.6% to MXN 105 million, reflecting lower prices and volumes and inventory devaluation.

• Automotive: 4Q23 revenue decreased 4.3% to MXN 3,576 million, while EBITDA grew 37.6% to MXN 414 million on Transmissions efficiencies and stronger Aftermarket performance.

• FY23 Chemical revenue declined 41.0% and EBITDA 75.2%; Automotive EBITDA grew 6.9%, while Consumer EBITDA declined 3.5%.