In This Article:
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Volume: Increased to 1.22 million tons, with a 4% annual increase in the polyester segment and a 10% quarterly increase in the plastic and chemical segment.
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EBITDA: Reported at $198 million, a 58% year-over-year increase.
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Comparable EBITDA: $218 million, exceeding expectations.
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Dividends: $132 million paid to shareholders.
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Net Debt: Increased to $1.81 billion.
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Net Debt to EBITDA Ratio: 3.1 times, down from 3.3 times.
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CapEx: $24 million, with guidance reduced to $150 million for the year.
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Polyester Segment Volume: 995,000 tons, a 4% annual increase.
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Plastic and Chemical Segment Volume: 222,000 tons, a 10% quarterly increase.
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Free Cash Flow: Investment in working capital of $43 million.
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Guidance for Comparable EBITDA: Updated to $675 million for 2024.
Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Alpek SA (FRA:27A) surpassed expectations for the quarter, achieving the highest comparable EBITDA since 2022 at $218 million.
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The company paid $132 million in dividends to shareholders, demonstrating strong cash flow and commitment to returning value.
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Alpek SA (FRA:27A) is preparing for a spinoff from Alpha, which is expected to enhance liquidity and attract a broader investor base.
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Volume increased on both a quarterly and annual basis, reaching 1.22 million tons due to stable demand and normalization of operations.
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The company maintained its investment-grade rating across all three rating agencies, with Fitch reaffirming its stable rating.
Negative Points
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High ocean freight costs, while beneficial in the short term, are expected to normalize by 2025, potentially impacting margins.
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Net debt increased to $1.81 billion, with a net debt to EBITDA ratio of 3.1 times, indicating a need for continued focus on deleveraging.
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Guidance for the fourth quarter implies a 15% sequential contraction and a 35% year-on-year contraction in EBITDA.
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The company faces challenges from declining oil prices and a cautious market environment, which may impact purchasing volumes.
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There is uncertainty regarding the impact of the spinoff on shareholder behavior, with potential for market adjustments post-split.
Q & A Highlights
Q: Can you quantify the impact of higher shipping rates in the polyester business and explain the dynamics for the fourth quarter? A: Jorge Young Carecedo, CEO: The third quarter saw a $50 million improvement in EBITDA, with 70-75% attributed to higher freight costs. The fourth quarter is expected to see a 15% sequential contraction due to seasonality, lower oil prices, and declining raw material costs, which may impact purchasing volumes.