ALPEK (ALPEKA) Q1 2025 earnings summary

Executive summary

• Navigated a challenging market with global overcapacity, lower freight costs, and increased import competition, especially impacting the polyester segment.

• 1Q25 volume was 1,119 ktons, flat sequentially and down 7% year-over-year, reflecting softer demand and persistent global overcapacity, especially in Polyester.

• Comparable EBITDA reached $126 million, down 25% QoQ and 18% YoY, in line with expectations amid market volatility.

• Controladora Alpek was listed on the Mexican Stock Exchange in April 2025, with a planned merger with ALPEKA by end of 2025 to enhance liquidity and shareholder value.

• Four strategic pillars: solidifying core business, boosting value-added products, capitalizing on emerging trends, and maintaining financial flexibility.

Financial highlights

• Revenues were $1.72 billion, down 1% sequentially and 10% YoY, mainly due to lower volumes and softer pricing.

• Quarterly oil/total volume was 1.12 million tons, down 7% year-over-year and flat sequentially.

• Reported EBITDA was $131 million, including a $15 million inventory adjustment and $10 million in shutdown/reorganization costs.

• Comparable EBITDA was $126 million, down 18% year-over-year and 25% sequentially.

• Operating free cash flow was $8 million for the quarter, improving from prior quarters.

Outlook and guidance

• 2025 guidance is under review due to evolving tariff dynamics and demand shifts; no update provided yet.

• Focus remains on cost structure improvement, asset productivity, and financial flexibility.

• Demand expected to gradually recover in coming quarters; working capital normalization anticipated in the second half.

• Guidance for Chinese PET margins remains around $160/ton, with recent improvement seen in April.

• Reducing leverage to 2.5x remains a priority, with working capital release expected by year-end, below $100 million.