Sigma Foods (SIGMAF) Q4 2023 earnings summary

Executive summary

• 2023 revenue fell 9% YoY as Alpek’s decline outweighed food-segment growth; reported and comparable EBITDA fell 33% and 20%, respectively.

• Transformation advanced through the Axtel spin-off, lower shareholder distributions, debt refinancing and cost actions; priorities include asset monetization, debt reduction and a potential Alpek spin-off.

Financial highlights

• 2023 revenue was $16.388B, down 9% YoY; 4Q23 revenue was $3.885B, down 13% YoY, mainly on lower Alpek volume and prices.

• 2023 reported EBITDA was $1.391B, down 33% YoY; comparable EBITDA was $1.623B, down 20% YoY.

• 4Q23 reported EBITDA was $282M, down 19% YoY; comparable EBITDA was $395M, down 8% YoY.

• FY operating income was $149M versus $1.608B in 2022; 2023 included $756M of impairments.

• 4Q23 majority net loss was $652M; FY majority net loss was $711M versus net income of $578M in 2022.

Outlook and guidance

• 2024 priorities include selective asset monetization, debt reduction and completion of the transformation, including a potential Alpek spin-off, conditional on a solid financial position for the combined entity.

• Food-business outlook is steady, with strong Americas performance expected and gradual improvement in Europe.

• Petrochemical recovery is expected to remain slow amid persistent market headwinds; reference margins showed initial improvement late in 2023.

• Alpek’s cost and cash actions included two plant closures with more than $40M in expected annual savings; capex was optimized against initial guidance.