ALFA reports 2Q19 EBITDA of US $595 million

MONTERREY, Mexico, July 17, 2019 /PRNewswire/ -- ALFA, S.A.B. de C.V. (BMV: ALFAA) (ALFA), a leading holding company that manages a portfolio of diversified subsidiaries with global operations announced today its unaudited results for the second quarter of 2019 ("2Q19"). All figures have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Message from ALFA's President

"ALFA's consolidated second quarter operating and financial results were in line with our expectations and remain on-track to achieve full-year Guidance supported by sequential EBITDA growth across our businesses. Underlying performance was in-line or better-than-expected in all subsidiaries.

With respect to the individual companies, Sigma was able to mitigate the impact of higher pork prices brought about by the African Swine Fever in 2Q19 and sustained EBITDA growth driven by better margins in Mexico, U.S. and LatAm. Even though U.S. pork prices decreased in June, the risk of further volatility remains, and Sigma will continue working diligently to address this situation.

After getting off to a slow start to the year, Alpek posted a solid recovery in 2Q19 even as feedstock prices declined. Alpek's underlying performance, when adjusted for the non-cash inventory loss related to lower feedstock prices, was in-line supported by better-than-expected reference polyester and polypropylene margins.

Results from Nemak are also in line with expectations which anticipated lower volume in all regions from a combination of softening industry conditions and demand from certain OEM customers. As part of its ongoing operating efficiency initiatives, Nemak recently announced that it is preparing to cease operations at a small plant in Canada by mid-2020.

Through the first half of the year, Axtel has posted better-than-expected EBITDA driven by operating efficiencies. Whereas Newpek reported a smaller EBITDA loss quarter-on-quarter supported by higher oil prices versus 1Q19.

Consolidated Net Debt was down quarter-on-quarter, and we anticipate further reduction by year-end supported by strong cash flow generation coupled with proceeds from the sale of non-core assets. During 2Q19, Axtel completed the sale of its Mass Market business, and Alpek is expected to close the sale of its two cogeneration power plants in the coming months.

In sum, ALFA's consolidated results reflect the expected performance across our businesses and several value-enhancing initiatives are moving forward."

Álvaro Fernández

About ALFA

ALFA is a holding company that manages a portfolio of diversified subsidiaries with global operations: Alpek, one of the world's largest producers of polyester (PTA, PET and fibers), and the leader in the Mexican market for polypropylene, expandable polystyrene (EPS) and caprolactam. Sigma, a leading multinational food company, focused on the production, marketing and distribution of quality foods through recognized brands in Mexico, Europe, United States and Latin America. Nemak, a leading provider of innovative lightweighting solutions for the global automotive industry, specializing in the development and manufacturing of aluminum components for powertrain, structural components and for electric vehicles. Axtel, a provider of Information Technology and Communication services for the enterprise and government segments in Mexico. Newpek, an oil and gas exploration and production company with operations in Mexico and the United States. In 2018, ALFA reported revenues of Ps. 366,432 million (US $19.1 billion), and EBITDA of Ps. 55,178 million (US $2.9 billion). ALFA's shares are quoted on the Mexican Stock Exchange and on Latibex, the market for Latin American shares of the Madrid Stock Exchange. For more information, please visit www.alfa.com.mx

Disclaimer

This release may contain forward-looking information based on numerous variables and assumptions that are inherently uncertain. They involve judgments with respect to, among other things, future economic, competitive and financial market conditions and future business decisions, all of which are difficult or impossible to predict accurately. Accordingly, results could vary from those set forth in this release. The report presents unaudited financial information. Figures are presented in Mexican Pesos or US Dollars, as indicated. Where applicable, Peso amounts were translated into US Dollars using the average exchange rate of the months during which the operations were recorded. Financial ratios are calculated in US Dollars. Due to the rounding up of figures, small differences may occur when calculating percent changes from one period to the other.

SOURCE ALFA, S.A.B. de C.V.

Related Links

http://www.alfa.com.mx