In This Article:
Release Date: April 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Nemak SAB de CV (NMAKF) reported a 3% year-over-year increase in EBITDA to $149 million, driven by operating efficiencies and improved profitability.
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The company reduced capital expenditure by 38% compared to the same period last year, prioritizing the use of existing assets.
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Nemak SAB de CV (NMAKF) secured new business worth approximately $90 million in annual revenue, with significant extensions in the ICE segment.
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The company achieved a 22% reduction in emissions, surpassing its intermediate target, and increased renewable electricity consumption to 30%.
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Nemak SAB de CV (NMAKF) maintained a robust liquidity position with $299 million in cash and over $400 million in fully available committed credit lines.
Negative Points
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Nemak SAB de CV (NMAKF) experienced a 7% decline in volume year-over-year, attributed to reduced vehicle production in Europe and North America.
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Operating income decreased by 9% year-over-year due to a $5 million non-cash impairment related to non-operating assets.
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The company reported a net loss of $160 million, affected by non-cash currency exchange effects from EUR denominated liabilities.
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Revenue in Europe decreased by 7% year-over-year due to lower volume and mix, partially offset by product repricing.
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The company faces potential challenges from tariff scenarios, which could impact industry demand and volumes.
Q & A Highlights
Q: Why is there a discrepancy between the $64 million CapEx reported in the press release and the cash flow statement? Is there a timing issue on cash disbursements? A: Yes, the discrepancy is due to payment terms. Some capital expenditures are booked as pending payments in working capital, causing differences. This year, the amount was slightly higher. Regarding full-year CapEx guidance, the first quarter reflects calendarization, with more spending expected later in the year. - Alberto Sada, CFO
Q: Are the cost benefits seen this quarter a continuation of efforts from 2024, or are there new measures? How would tariffs impact your cost structure? A: The cost benefits are ongoing efforts to improve efficiencies, with some progress made this year. In case of tariffs, we have a toolkit to adjust our cost structure, aiming to make it as variable as possible to volume changes. This includes adjustments in labor and manufacturing costs. - Alberto Sada, CFO
Q: What is the outlook for vehicle sales in North America, Europe, and the rest of the world, considering the front-loaded sales in Q1 due to tariffs? A: In North America, demand increased as customers built inventory to protect against tariffs. We maintain close contact with customers in all regions, and so far, production targets remain unchanged. However, this could vary depending on tariff developments. - Armando Tamez, CEO