Alicorp (ALICORC1) Q2 2024 earnings summary

Executive summary

• Announced agreement to sell the Crushing business in Bolivia to Asai Capital Holdings, aligning with a strategy to focus on core businesses, reduce volatility, and lower country risk exposure.

• Q2 2024 saw strong adjusted gross profit and EBITDA growth, mainly driven by Consumer Goods Peru, despite lower overall volumes and Aquafeed headwinds.

• Net income rose 2.2x year-over-year to S/ 196.0 million, driven by higher operating profit and lower financial expenses.

• Management remains optimistic for 2024, updating guidance to reflect stronger-than-expected EBITDA growth.

Financial highlights

• Adjusted gross profit rose 21% year-over-year to PEN 1,437 million, with gross margin improving to 27.5%.

• Adjusted EBITDA increased 28% year-over-year to PEN 806 million, with margin up to 15.8%.

• Consumer Goods Peru EBITDA up 54.5% year-over-year to S/ 205.9 million; B2B EBITDA up 14.6% to S/ 86.7 million.

• Aquafeed EBITDA fell 53% year-over-year due to industry headwinds; Crushing EBITDA increased by $11 million to $24 million.

• Main adjustments included a PEN 89.8 million FX gain in Crushing and a PEN 1.8 million intangible asset write-off.

Outlook and guidance

• Revenue expected to decline low single digits for 2024 as focus remains on value over volume.

• Updated full-year 2024 consolidated EBITDA growth guidance to 21–26%, and 18–22% excluding Crushing.

• CapEx for 2024 expected at $76 million ($62 million excluding Aquafeed).

• Net debt to adjusted EBITDA expected between 1.9x and 2.4x by year-end, depending on acquisitions and shareholder distributions.

• Expectation of temporarily higher leverage in coming months due to potential acquisition of Refineria del Espino and further share buybacks, partially offset by the planned sale of the Crushing business.