Grupo Elektra Announces 53% EBITDA Growth,to Historical Maximum of Ps.3,286 Million in 3Q12 - Consolidated revenue grows 38% to Ps.18,247 million, supported by 63% increase in financial income -

- Consolidated gross portfolio shows solid growth of 64%, to Ps.67,342 million -

- Banco Azteca has more than 16 million credit accounts, and more than 15 million deposit accounts -

- Grupo Elektra surpasses 6,000 points of sale in 9 countries over America -

MEXICO CITY, Oct. 25, 2012 /PRNewswire/ -- Grupo Elektra, S.A.B. de C.V. (BMV: ELEKTRA*; Latibex: XEKT), Latin America's leading financial services company and specialty retailer and the largest non-bank provider of cash advance services in the United States, reported today its financial results for the third quarter and the first nine months of 2012 .

"We reached historical EBITDA for a third quarter, resulting from the remarkable dynamism in consolidated revenue and our solid operating efficiency," commented Grupo Elektra and Banco Azteca CEO Carlos Septien. "The expansion in consolidated revenue comes from a 63% increase in financial income, as part of a remarkable growth of the loan portfolio and the increase in sales of goods as a result of growing demand for our attractive offering of world-class products and services."

Consolidated third quarter results

Consolidated income was Ps.18,247 million, up 38% from Ps.13,257 million for the same quarter last year. Costs and operating expenses were Ps.14,961 million, compared to Ps.11,112 million in the same period of 2011.

Grupo Elektra reported EBITDA of Ps.3,286 million, 53% higher than the Ps.2,145 million for the same period of last year; EBITDA margin was 18% this quarter, two percentage points above last year. The company reported a net profit of Ps.1,543 million, compared to a net profit of Ps.14,631 million a year ago.



3Q 2011

3Q 2012

Change




Ps.

%






Consolidated revenue

$13,257

$18,247

$4,990

38%






EBITDA

$2,145

$3,286

$1,142

53%






Net result

$14,631

$1,543

$(13,088)

-89%






Net result per share

$60.54

$6.51

$(54.03)

-89%






Figures in millions of pesos
*As of 30 September, 2011, Elektra outstanding shares were 241.7 million and as of 30 September, 2012, were 237.1 million.




Income

Consolidated income grew 38%, as a result of a remarkable 63% increase in financial income and a 6% growth in commercial sales.  

Financial income grew to Ps.12,084 million from Ps.7,416 million last year.  Advance America contributed to the increase of financial income with Ps.2,280 million; as previously announced, Grupo Elektra acquired Advance America —the largest non-bank provider of cash advance services in the US— in April of this year, and consolidates the company's results in Grupo Elektra's financial statements.  

The dynamism of Banco Azteca income also contributed with the growth of the financial business. Banco Azteca income increased 32%, to Ps. 8,300 million from Ps. 6,271 million, mainly as a result of an expansion of personal loans, Micronegocio Azteca credits and Presta Prenda.

The growth of commercial income is in the context of greater sales of white goods, electronics, motorcycles and computer sales, among others.  

Costs and expenses

Consolidated costs for the quarter were Ps. 6,902 million, compared to Ps.6,193 million from the previous year. The change mainly derives from a 27% increase in financial cost, to Ps. 2,595 million from Ps. 2,043 million a year ago. The change in financial cost was due to the register of Advance America's costs this period, which totaled Ps. 418 million.

Consolidated operating expenses were Ps. 8,059 million, compared to Ps. 4,919 million the same quarter of the previous year; the increase is due mainly to increases in personnel expenses arising from hiring employees focused on growing and providing better customer service. The increase in expenses also reflects the consolidation of Advance America's expenses this period.

EBITDA and net result

Consolidated EBITDA was Ps. 3,286 million, 53% higher than the Ps. 2,145 million a year ago; the EBITDA margin for the quarter was 18%, two percentage points up from 16% the previous year.

The most significant change below EBITDA was a negative variation of Ps. 18,727 million in other financial results, as a consequence of the valuation of financial instruments owned by the company – which does not imply cash flow – that was less favorable for this quarter, compared to last year.  That change was partially offset by a Ps. 5,298 million decrease in tax provision.

Grupo Elektra reported net income of Ps. 1,543 million, compared to net income of Ps. 14,631 million a year ago.

Consolidated balance sheet

Loan portfolio and deposits

Banco Azteca Mexico and Banco Azteca, Advance America and Elektrafin Latin America's consolidated gross portfolio as of September 30, 2012, was Ps. 67,342 million, 64% higher than the Ps. 41,059 million the previous year, resulting from the growing preference of customers for our credit products, which directly improve their quality of life. Consolidated delinquency rate was 5.9% at the end of the period.

The most significant driver of the consolidated gross portfolio was a 59% growth in the gross portfolio of Banco Azteca Mexico, to Ps. 56,730 million from Ps. 35,586 million. The gross portfolio of Advance America as of September 30, 2012, totaled Ps. 3,549 million.

The delinquency rate of Banco Azteca México at the end of the quarter was 5.1%. The non-performing loan portfolio is reserved 1.7 times, unchanged from the last year.

At the end of the quarter, the bank had a total of 16.5 million active credit accounts, 41% above the 11.7 million from the previous year. The large customer base is an important strength of the bank that further reduces credit risk. The average term of the credit portfolio for principal credit lines – consumer, personal loans and Tarjeta Azteca – was 60 weeks at the end of the third quarter.

Consolidated deposits, as of September 30, 2012, were Ps. 62,140 million, 16% above the Ps. 53,359 million from the previous year.

Banco Azteca Mexico deposits were Ps. 61,167 million, 12% higher than last year. The total number of active savings and deposit accounts of the bank was 15.2 million, an increase of 20% compared to 12.7 million at the end of the same period a year ago.

As of September 30, 2012, the estimated capitalization index of Banco Azteca Mexico was 12.2%. The company considers the index to be at a level that optimizes equity profitability.

Debt

As of September 30, 2012, consolidated total debt with cost was Ps. 20,823 million, of which Ps. 19,015 million correspond to the commercial business, and Ps. 1,808 million to the financial business.

The balance of cash, cash equivalents and marketable securities for the commercial business was Ps. 24,499 million at the end of the period; as a result net cash for the commercial business – excluding debt with cost – was a positive Ps. 5,484 million.

Expansion

Grupo Elektra currently has 6,142 points of sale, compared to 2,611 a year ago. This change is mainly due to the acquisition of Advance America, which adds 2,409 points of sale to the company this period. Additionally, 1,080 Financial Services Stores were opened – as part of the company's strategy to further strengthen this business segment – and 42 Elektra stores.

There are 3,131 points of sale in Mexico, 2,409 in USA and 602 in Central and South America. The company's large distribution network allows us to stay close to customers and provides superior market positioning in the countries where we operate.

Consolidated nine months results

Consolidated total income in the first nine months of 2012 was Ps. 50,401 million, 39% above Ps. 36,330 million the same period of 2011. The EBITDA was Ps. 9,408 million, 50% higher than the Ps. 6,278 million a year ago; the EBITDA margin in the first nine months was 19% compared to 17% the previous year. The company registered a net loss of Ps. 21,478 million, compared to net income of Ps. 19,220 million last year, mainly due to depreciation this period in the market value of underlying financial instruments that the company holds, which doesn't imply cash flow, compared to appreciation in the prior year.



9M 2011

9M 2012

Change




Ps.

%






Consolidated revenue

$36,330

$50,401

$14,071

39%






EBITDA

$6,278

$9,408

$3,129

50%






Net result  

$19,220

$(21,478)

$(40,698)

----






Net result per share

$79.52

$(90.59)

$(170.11)

----






Figures in million of pesos
*As of September 30, 2011, Elektra's outstanding shares were 241.7 million and the number of shares as of September 30, 2012, was 237.1 million.




Company Profile:

Grupo Elektra (www.grupoelektra.com.mx) is Latin America's leading financial services company focused on the mass market. The Group operates over 6,000 points of sale in Mexico, USA, Brazil, Guatemala, Honduras, Peru, Panama, El Salvador and Argentina.  Grupo Elektra also sells and markets its consumer finance, banking and financial products and services through Banco Azteca branches located in Mexico, Brazil, Panama, Guatemala, Honduras, Peru and El Salvador.

Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, contributing to build the middle class of the countries in which they operate and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com), Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. The companies include Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Advance America (www.advanceamerica.net), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx) and Grupo Iusacell (www.iusacell.com.mx). Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, the member companies share a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.

Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.  Other risks that may affect Grupo Elektra and its subsidiaries are identified in documents sent to securities authorities.

Investor Relations

Bruno Rangel
Grupo Salinas
Tel. +52 (55) 1720-9167
jrangelk@gruposalinas.com.mx


Carlos Casillas
Grupo Elektra S.A. de C.V.
Tel. +52 (55) 1720-0041
cjcasillas@gruposalinas.com.mx




Press Relations

Jaime Ramos
Grupo Salinas
+ 52 (55) 1720 1416
jramosr@tvazteca.com.mx


Daniel McCosh
Grupo Salinas
Tel. +52 (55) 1720-0059
dmccosh@gruposalinas.com.mx




GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

MILLIONS OF MEXICAN PESOS




















3Q11


3Q12


Change










Financial income

7,416

56%


12,084

66%


4,668

63%

Commercial income

5,841

44%


6,163

34%


322

6%

Income

13,257

100%


18,247

100%


4,990

38%










Financial cost

2,043

15%


2,595

14%


553

27%

Commercial cost

4,150

31%


4,306

24%


156

4%

Costs

6,193

47%


6,902

38%


709

11%










Gross income

7,064

53%


11,346

62%


4,282

61%










Sales, administration and promotion expenses

4,919

37%


8,059

44%


3,140

64%

Depreciation and amortization

434

3%


577

3%


142

33%

Operating expenses

5,353

40%


8,636

47%


3,283

61%










Operating income

1,710

13%


2,710

15%


999

58%










EBITDA

2,145

16%


3,286

18%


1,142

53%










Comprehensive financial result:









    Interest income

51

0%


82

0%


30

59%

    Interest expense

(334)

-3%


(480)

-3%


(145)

-43%

    Foreign exchange gain (loss), net

775

6%


(2)

0%


(777)

----

    Other financial results, net

18,382

139%


(344)

-2%


(18,727)

----


18,874

142%


(745)

-4%


(19,619)

----










Other expense, net

(13)

0%


(15)

0%


(3)

-23%










Participation  in  the  net  income of









CASA and other associated companies

(228)

-2%


8

0%


237

----










Income before income tax

20,343

153%


1,958

11%


(18,386)

----










Income tax

(5,713)

-43%


(415)

-2%


5,298

----










Consolidated net income

14,631

110%


1,543

8%


(13,088)

----



GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

MILLIONS OF MEXICAN PESOS











9M11


9M12


Change










Financial income

18,719

52%


32,420

64%


13,701

73%

Commercial income

17,611

48%


17,981

36%


371

2%

Income

36,330

100%


50,401

100%


14,071

39%










Financial cost

4,141

11%


8,550

17%


4,409

100%

Commercial cost

12,203

34%


12,465

25%


262

2%

Costs

16,344

45%


21,015

42%


4,672

29%










Gross income

19,986

55%


29,386

58%


9,400

47%










Sales, administration and promotion expenses

13,708

38%


19,978

40%


6,270

46%

Depreciation and amortization

1,293

4%


1,619

3%


325

25%

Operating expenses

15,001

41%


21,597

43%


6,596

44%










Operating Income

4,985

14%


7,789

15%


2,804

56%










EBITDA

6,278

17%


9,408

19%


3,129

50%










Comprehensive financial result:









    Interest income

575

2%


1,116

2%


541

94%

    Interest expense

(928)

-3%


(1,397)

-3%


(469)

-51%

    Foreign exchange gain (loss), net

504

1%


(302)

-1%


(806)

----

    Monetary loss

-

0%


-

0%


-

0%

    Other financial results, net

21,870

60%


(37,380)

-74%


(59,249)

----


22,021

61%


(37,962)

-75%


(59,983)

----










Other expense, net

(31)

0%


(14)

0%


17

55%










Participation  in  the  net  income expense of









CASA and other associated companies

(247)

-1%


83

0%


330

----










Income (loss) before income tax

26,728

74%


(30,104)

-60%


(56,832)

----










Income tax

(7,508)

-21%


8,626

17%


16,134

----










Consolidated net income (loss)

19,220

53%


(21,478)

-43%


(40,698)

----



GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

MILLIONS OF MEXICAN PESOS













Commercial Business

Financial Business

Grupo Elektra


Commercial Business

Financial Business

Grupo Elektra












Change













At September 30, 2011


At September 30, 2012














Cash and cash equivalents

1,905

13,288

15,193


1,148

15,589

16,737


1,544

10%












Marketable financial instruments

16,739

18,917

35,656


23,351

8,773

32,125


(3,531)

-10%












Performing loan portfolio

355

28,380

28,735


390

47,695

48,085


19,351

67%

Total past-due loans

183

1,460

1,643


264

3,278

3,542


1,899

116%












Gross loan portfolio

538

29,840

30,378


653

50,974

51,627


21,249

70%












Allowance for credit risks

195

2,728

2,923


266

6,048

6,314


3,391

116%












Loan portfolio, net

343

27,112

27,455


387

44,926

45,313


17,859

65%























Inventories

6,449


6,449


6,527


6,527


78

1%












Other current assets

4,282

4,158

8,439


13,597

5,249

18,846


10,407

123%












Total current assets

29,717

63,475

93,192


45,010

74,537

119,548


26,356

28%












Financial instruments

13,083


13,083


-

111

111


(12,972)

-99%












Performing loan portfolio

33

10,510

10,543


51

15,213

15,264


4,721

45%

Total past-due loans

0

138

138


2

449

451


313

228%

Loan portfolio

33

10,647

10,681


53

15,662

15,715


5,034

47%












Other non-current assets

29,660


29,660


810


810


(28,850)

-97%












Investment in shares

2,778

19

2,797


2,689

15

2,704


(93)

-3%

Property, furniture, equipment and











 investment in stores, net

4,435

1,473

5,908


4,315

2,613

6,929


1,021

17%

Other Assets

1,310

2

1,313


1,056

6,661

7,716


6,404

488%












TOTAL ASSETS

81,017

75,617

156,633


53,934

99,600

153,533


(3,100)

-2%























Demand and term deposits


53,359

53,359



62,140

62,140


8,781

16%

Creditors from repurchase agreements


6,444

6,444



4,134

4,134


(2,309)

-36%

Short-term debt

4,811

403

5,214


5,526

685

6,212


998

19%

Financial leasing

17


17


7


7


(10)

-56%

Short-term liabilities with cost

4,828

60,206

65,033


5,534

66,960

72,494


7,460

11%












Suppliers and other short-term liabilities

7,563

3,264

10,827


7,395

6,070

13,465


2,638

24%

Short-term liabilities without cost

7,563

3,264

10,827


7,395

6,070

13,465


2,638

24%












Total short-term liabilities

12,391

63,469

75,860


12,929

73,029

85,959


10,099

13%












Long-term debt

9,984

1,102

11,086


13,452

1,123

14,575


3,489

----

Financial leasing

13


13


29


29


16

----

Long-term liabilities with cost

9,996

1,102

11,099


13,481

1,123

14,604


3,505

----












Long-term liabilities without cost

12,475

948

13,423


8,288

1,577

9,865


(3,557)

----












Total long-term liabilities

22,471

2,050

24,521


21,769

2,700

24,469


(52)

----












TOTAL LIABILITIES

34,862

65,519

100,381


34,699

75,729

110,428


10,047

10%












TOTAL STOCKHOLDERS' EQUITY

46,155

10,098

56,252


19,235

23,871

43,106


(13,147)

-23%























LIABILITIES + EQUITY

81,017

75,617

156,633


53,934

99,600

153,533


(3,100)

-2%



INFRASTRUCTURE











3Q11


3Q12


Change










Points of sale in Mexico









Elektra (1)

938

36%


968

16%


30

3%

Salinas y Rocha (1)

55

2%


55

1%


-

0%

Freestanding branches (2)

1,146

44%


2,108

34%


962

84%

Total

2,139

82%


3,131

51%


992

46%










Points of sale in Central and South America








Elektra (3)

218

8%


230

4%


12

6%

Freestanding branches

254

10%


372

6%


118

46%

Total

472

18%


602

10%


130

28%










Points of sale in North America









Advance America

-

-


2,409

39%


2,409

----

Total

-

-


2,409

39%


2,409

----










TOTAL

2,611

100%


6,142

100%


3,531

----



















(1) Each store has a Banco Azteca branch.









(2) In 3Q12, includes 45 Bodegas de Remate that continues operating only financial services.





(3) In 3Q12, only 204 Central and South America Elektra's store have a Banco Azteca branch.
































Floor space (m2)









Elektra Mexico

817,944

70%


834,904

66%


16,961

2%

Elektra Central and South America

162,755

14%


162,346

13%


(409)

0%

Salinas y Rocha

59,614

5%


58,995

5%


(619)

-1%

Freestanding branches

131,208

11%


213,820

17%


82,612

63%

TOTAL

1,171,521

100%


1,270,066

100%


98,544

8%




























Employees









Mexico

38,999

84%


58,597

78%


19,598

50%

Central and South America

7,300

16%


10,648

14%


3,348

46%

North America

-

-


6,056

8%


6,056

----

Total employees

46,299

100%


75,301

100%


29,002

63%



SOURCE Grupo Elektra, S.A.B. de C.V.



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