Grupo Elektra Announces 54% EBITDA Growth to Historical Maximum of Ps.3,308 Million in 1Q12

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MEXICO CITY, April 11, 2012 /PRNewswire/ -- Grupo Elektra, S.A.B. de C.V. (BMV: ELEKTRA*; Latibex: XEKT), Latin America's leading financial services company and specialty retailer, reported today its financial results for the first quarter of 2012.

"We reached a historical EBITDA maximum for a first quarter, resulting from the remarkable dynamism in consolidated revenue during the period, together with our solid operating efficiency", commented Grupo Elektra and Banco Azteca CEO Carlos Septien. "The strength in consolidated income is mainly related to a 67% growth in financial income, in the context of continuous credit expansion, which improves the purchasing power of millions of families in Mexico, and Center and South America."

Consolidated first quarter results

Consolidated income was Ps.15,108 million, up 35% from Ps.11,214 million for the same quarter last year.  Costs and operating expenses were Ps.11,800 million, compared to Ps.9,060 million in the same period of 2011.

Grupo Elektra reported EBITDA of Ps.3,308 million, a historical maximum for a first quarter, and 54% higher than the Ps.2,154 million for the same period of last year. EBITDA margin was 22% this quarter, three percentage points above of last year's.  The company registered net loss of Ps.3,834 million, compared to net profit of Ps.622 million a year ago.

Income

Consolidated income grew 35%, to Ps.15,108 million, as a result of a remarkable 67% growth in financial income and a 4% growth in commercial sales.

The growth in financial income mainly results from the dynamism in Banco Azteca Mexico's income, which grew 76%, to Ps.7,649 million from Ps.4,354 million, as a consequence of the expansion of personal loans, credits from Micronegocio Azteca and Presta Prenda. The increase of commercial revenue is generated in the context of solid motorcycles, electronics and computer sales.

Costs and expenses

Consolidated costs for the quarter were Ps.6,829 million, compared to Ps.4,864 million from a year ago. The change mainly derives  from an increase in costs from Banco Azteca Mexico, to Ps.2,569 million, compared to Ps.779 million, from the previous year, caused by the growth in interests paid to savers—in the context of attraction of more traditional deposits and savings— as well as an increase in loan-loss reserves, congruent with the expansion of the balance of the loan portfolio.

Operating expenses were Ps.4,971 million, 18% above Ps.4,196 million for the same period a year ago; the change is mainly explained by increases in personnel expenses, in the context of growing operations of the company. The increase in expenses is smaller than the increase in income for the period, reflecting effective actions that improve the operating efficiency of the company.

EBITDA and net result

Consolidated EBITDA was Ps.3,308 million, 54% higher compared to Ps.2,154 million reported a year ago; the EBITDA margin for the quarter was 22%, up from 19% for the same period of 2011.

The most significant change below EBITDA was a negative variation of Ps.7,079 million in other financial income, as a result 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.1,804 million decrease in tax provision.

Grupo Elektra reported net loss of Ps.3,834 million, compared to net income of Ps.622 million a year ago.

Consolidated Balance

Consolidated loan portfolio and deposits

Banco Azteca Mexico and Banco Azteca and Elektrafin Latin America's consolidated gross portfolio as of March 31, 2012, was Ps.49,419 million, 49% higher than Ps.33,084 million a year ago, resulting from the growing preference of our clients for our credit products, which directly improve their quality of life. Consolidated delinquency rate was 5.2% at the end of the period.

Consolidated deposits, as of March 31, 2012, were Ps.55,291 million, 9% above Ps.50,815 million last year.

The most significant driver of the dynamic trend of the consolidated gross portfolio was a 48% growth in the gross portfolio of Banco Azteca Mexico, to Ps. 43,023 million from Ps.29,151 million. The delinquency rate of the Bank, as of March 31, 2012, was 4.8%. The non-performing loan portfolio is reserved 1.8 times, above the 1.5 times from the previous year.

At the end of the quarter, the bank had a total of 13.6 million active credit accounts, 44% above the 9.5 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 58 weeks at the end of the first quarter.

The Bank had a total of 13.8 million active savings and deposit accounts, as of March 31, 2012, an 21% increase compared to 11.4 million accounts at the end of the same period a year ago.

As of March 31, 2012, the estimated capitalization index of Banco Azteca was 12.9%. The company considers the index to be at a level that optimizes equity profitability.

Debt

As of March 31, 2012, consolidated total debt with cost was Ps.15,023 million, from which Ps.13,926 million belong to the commercial business, and Ps.1,097 million to the financial business.

Net cash for the commercial business —excluding debt with cost— was a positive Ps.7,668 million, almost double compared to a positive balance of Ps.3,888 million as of March 31, 2011.  

Expansion

Grupo Elektra currently has 2,989 points of sale, compared to 2,311 a year ago. This change is mainly due to the increase in the number of Financial Services Stores, as part of the company's strategy to further strengthen this business segment.  There are 2,457 points of sale in Mexico, and 532 in Central and South America.  The company's large distribution network allows us to stay close to customers and provides superior market positioning in Mexico and Latin America.

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 2,900 points of sale in Mexico, 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), 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.

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