In This Article:
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Revenue: $260 million, a 4% year-over-year decline.
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EBITDA: $28 million, doubling from the same period last year.
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Draxton Revenue: $235 million, reflecting a 5% annual decrease.
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GISEderlan Revenue Growth: 15% annual increase.
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Net Debt: Approximately $228 million.
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Net Leverage Ratio: 2.5 times.
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CapEx Deployment: Approximately $38 million for the second quarter.
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Dividend Payment: $0.056 per share, totaling approximately $17 million.
Release Date: July 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Grupo Industrial Saltillo SAB de CV (MEX:GISSAA) reported a significant annual growth in EBITDA, doubling the figure from the same period last year.
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The company successfully closed refinancing endeavors through syndicated loans in Mexico and Europe, enhancing financial flexibility and improving the maturity profile.
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Draxton's facilities have been instrumental in improving profitability metrics, with strategic capacity expansions and operational enhancements.
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The company is advancing its transition strategy to focus on electrification agnostic parts and components with higher value added.
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Grupo Industrial Saltillo SAB de CV (MEX:GISSAA) has implemented a solar energy cell generation capacity expansion program across its Draxton plants in Europe and China, reducing environmental footprint and optimizing energy costs.
Negative Points
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Grupo Industrial Saltillo SAB de CV (MEX:GISSAA) reported a 4% year-over-year decline in consolidated revenues, mainly due to decreased casting volumes and lower base prices for raw materials and energy.
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Casting volume decreased by 4% compared to the same period last year, reflecting broader industry trends and a slowdown in vehicle production.
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In Europe, vehicle production declined by 5% annually, contributing to the deceleration in the European automotive sector.
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The company faces challenges from increased competition, particularly from Chinese companies considering entering the North American and European markets.
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Labor cost inflation remains a concern, with increases of 7% to 8% in North America, impacting the cost structure despite efforts to improve productivity and automation.
Q & A Highlights
Q: What is your estimate for the EBITDA margin by the end of the year, and can you provide more details on the additional casting capacity in North America? A: We do not provide specific guidance, but we are confident in maintaining low double-digit EBITDA margins. Our CapEx expansions in Foundry, particularly Lines six and seven, will boost revenue and margins. Regarding additional casting capacity, we are evaluating the need due to customer demand for relocating production to Mexico. We are focusing on high-margin products before adding capacity.