ALPEK (ALPEKA) Q3 2024 earnings summary

Executive summary

• Q3 2024 results exceeded expectations, with comparable EBITDA reaching $218M, up 37% year-over-year and 38% sequentially, driven by high ocean freight costs, improved margins, and stable demand.

• Volume rose 3% year-over-year and 1% sequentially to 1.22M tons, supported by stable demand and normalization at Altamira.

• ALFA shareholders approved the spin-off of Alpek, with completion expected in 2025, aiming to enhance liquidity, governance, and shareholder value.

• Dividend of $132M was paid in September after careful analysis to ensure financial stability.

• Management and board remain unchanged post-spin-off, targeting broader investor outreach and enhanced governance.

Financial highlights

• Comparable EBITDA was $218M, up 37% year-over-year and 38% sequentially, with reported EBITDA at $198M (+58% YoY, +16% QoQ).

• Volume reached 1.22M tons, up 3% YoY and 1% QoQ, driven by stable demand and Altamira normalization.

• Operating income surged to $134M (+299% YoY, +30% QoQ).

• Net debt rose to $1.81B, up 8% YoY and 5% QoQ, with a net debt-to-EBITDA ratio of 3.1x.

• CapEx for the quarter was $24M, mainly for maintenance.

Outlook and guidance

• 2024 comparable EBITDA guidance raised to $675M (from $600M), reflecting strong Q3 and cost reduction initiatives.

• CAPEX guidance reduced to $150M (from $200M), reflecting disciplined capital allocation.

• Volume guidance remains unchanged, with stable demand expected in both segments.

• Leverage expected to fall to 2.7–2.8x by year-end and 2.5x by mid-2025.

• Q4 expected to be seasonally weaker, with lower volumes and declining ocean freight rates.