Alpek Announces Consolidated Earnings Results for the Third Quarter and Nine Months of 2017; Provides Earnings Guidance for 2018
October 17, 2017 at 10:30 am EDT
Share
Alpek announced consolidated earnings results for the third quarter and nine months of 2017. For the quarter, the company revenue increased 6% versus third quarter of 2016 and was flat quarter-on-quarter as mixed volume growth was offset by higher average consolidated prices in both business segments. Third quarter 2017 comparable EBITDA was $108 million, 9% higher than the previous quarter, driven by a 20% increase in comparable Polyester EBITDA. Third quarter consolidated EBITDA was $3 million, including the $113 million M&G provision and a $9 million noncash inventory gain. Company posted a third quarter consolidated majority net loss of $400 million, including an aggregate impact of $460 million from nonrecurring provisions and impairment associated to M&G. Adjusting for the M&G impact, company's majority net income in the third quarter was $16 million. At the end of the third quarter, net debt was $1.2 billion, up 30% year-over-year and 13% versus the previous quarter. The aggregate net impact to its third quarter of 2017 consolidated net income was $420 million.
For the nine months, the company reported net loss $289 million, including an aggregate impact of $460 million from nonrecurring provisions and impairment associated to M&G. Adjusting for the M&G impact, company's majority net income was $127 million. On an absolute basis, net debt increased in third quarter of 2017 was $135 million of the total $151 million.
Base case is to resume PTA supply to M&G in the short term. But even in an extreme full M&G shutdown scenario for 2018, they expect EBITDA to recover back to a range of $450 million to $500 million.
Alpek SAB de CV is a Mexico-based company engaged in the chemicals sector. The Company's activities are divided into two business segments: Polyester and Plastics & Chemicals. The Polyester division focuses on the manufacture and distribution of purified terephthalic acid (PTA), polyethylene terephthalate (PET) and polyester fiber. The Plastics & Chemicals division is responsible for the production of polypropylene (PP), expandable polystyrene (EPS), caprolactam (CPL), ammonium sulfate, as well as specialty and industrial chemicals, such as surfactants, ethoxilates, glycoethers and desemulsionates. The Company's products are used in a range of industries, including consumer goods, food and beverages, automotive, construction, agriculture, oil and gas, as well as pharmaceuticals. It operates a number of production plants in the Americas. The Company is controlled by Alfa SAB de CV.