Energiekontor (TG:EKT)
Historical Stock Chart
From Dec 2019 to Dec 2024
Grupo Elektra Announces Record Net Income of Ps. 671 Million for
4Q04, up 57% YoY, and Ps. 1.9 Billion in 2004, up 60% YoY
- Record EBITDA of Ps. 1.3 Billion for 4Q04, up 21% YoY, and Ps. 4.1 Billion
for 2004, up 13% YoY -
MEXICO CITY, Feb. 16 /PRNewswire-FirstCall/ --
Financial Highlights
Ps. Million Change
4Q03 4Q04 $ %
Consolidated Revenues 6,505 8,028 1,523 23.4%
Gross Profit 3,009 3,521 512 17.0%
EBITDA 1,081 1,312 231 21.4%
Net Income 428 671 243 56.8%
EPS (pesos per share) 1.79 2.82 1.03 57.7%
EPS (US$ per ADR) * 0.64 1.01 0.37 57.7%
* Ps. 11.15 per US$
Ps. Million Change
2003 2004 $ %
Consolidated Revenues 21,845 26,315 4,469 20.5%
Gross Profit 9,645 11,620 1,975 20.5%
EBITDA 3,629 4,106 477 13.1%
Net Income 1,202 1,917 715 59.5%
EPS (pesos per share) 5.02 8.06 3.04 60.5%
EPS (US$ per ADR) * 1.80 2.89 1.09 60.5%
* Ps. 11.15 per US$
Grupo Elektra S.A. de C.V. (BMV: ELEKTRA*; NYSE: EKT; Latibex: XEKT), Latin
America's leading specialty retailer, consumer finance and banking and
financial services company, reported today its financial results for the fourth
quarter and full year of 2004.
Javier Sarro, CEO of Grupo Elektra said, "Congratulations go to all of our
talented employees from both our retail and financial divisions for delivering
double-digit revenue and EBITDA growth for the year and for an excellent job in
meeting our customers' needs. Our store improvements and expansions throughout
all our formats with added goods and services are a sound foundation for growth
in 2005. We are bullish on 2005 as we continue to deliver valued-added
merchandise and financial products and services to the vast majority of the
population in Mexico and other Latin American countries where we operate."
"We have a lot to celebrate in our second anniversary," said Carlos Septien,
CEO of Banco Azteca. "It has been two years of intense effort that has yielded
concrete results. Not only have we greatly expanded our product offering, but
also our customer base and the number of bank branches to serve them. We send
our warmest thanks to all of our employees that are making the dream of
bringing quality services to a once "unbankable" segment of the population. We
look forward to repeating this success in 2005." Mr. Septien concluded.
Rodrigo Pliego, Grupo Elektra's Chief Financial Officer, commented "Our results
during the past year clearly demonstrate our efforts to improve profitability.
Early on 2004, we took a major step in calling our Senior Notes issued in US
dollars and refinancing them with peso debt. The savings in financial expenses
is clear, as are the results of our store expansion program. For 2005, we will
continue improving our operating leverage, and expect the results to be evident
in our EBITDA for the year."
4Q04 and 2004 Financial Highlights
Consolidated Revenues
Total consolidated revenues increased 23.4% YoY from Ps. 6.5 billion in 4Q03 to
Ps. 8.0 billion in 4Q04, the highest level reached in a fourth quarter. This
result is explained by a solid 74.4% increase YoY in financial revenues from
Banco Azteca, from Ps. 1.2 billion in 4Q03 to Ps. 2.1 billion in 4Q04;
continued growth of merchandise sales, which increased 7.4% YoY from Ps. 4.8
billion in 4Q03 to Ps. 5.2 billion in 4Q04; and a 12.6% YoY growth in money
transfer revenues from Ps. 210.1 million in 4Q03 to Ps. 236.6 million in 4Q04.
Merchandise sales growth was consistent across Elektra and Bodega de Remates
formats, with YoY increases of 9.5% and 2.0%, respectively; and a 6.8% decrease
in the Salinas y Rocha format due to stores closed over the year. Growth was
buoyed by new, relocated and remodeled stores; the addition of new merchandise
including motorcycles, scooters and mopeds; LCD, HDTV and plasma televisions;
and cellulars with PDA technology; as well as our Empresario Azteca program. In
addition, our newest store format Elektricity is starting to show encouraging
results. Finally, we are also reaping the benefits of our continued aggressive
pricing and promotional strategies, and our door-to-door sales initiative.
Increases in Banco Azteca's financial income are largely due to greater credit
availability and streamlined processing of credit applications at our stores
and other channels; higher limits on personal loans; longer credit terms for
our weekly payments credit programs: and the success of our mobile sales force
(Comercializadora) in attracting new customers.
Lastly, other income includes Milenia, our extended warranties services; and
revenues from Afore Azteca and Seguros Azteca. In this revenue line, the
114.3% YoY increase is explained by very encouraging results registered from
our two newest business units.
Consolidated Revenues
Ps. Million Change
4Q03 4Q04 $ %
Total Revenues 6,505 8,028 1,523 23.4%
Merchandise 4,845 5,206 361 7.4%
Money Transfer 210 237 26 12.6%
Banco Azteca 1,246 2,148 902 72.4%
Other 204 437 233 114.3%
Ps. Million Change
2003 2004 $ %
Total Revenues 21,845 26,315 4,469 20.5%
Merchandise 15,982 17,682 1,700 10.6%
Money Transfer 743 893 149 20.1%
Banco Azteca 3,262 6,904 3,642 111.6%
Other 1,858 836 (1,022) (55.0%)
Total consolidated revenues for 2004 increased 20.5% YoY to Ps. 26.3 billion
from Ps. 21.8 billion in 2003. Merchandise sales for the year grew 10.6% to
Ps. 17.7 billion from Ps. 16.0 billion in 2003 as revenue from our store
formats Elektra, Salinas y Rocha and Bodega de Remates grew YoY 11.7%, 1.8% and
7.6%, respectively. Revenues from Banco Azteca increased 111.6% YoY to Ps. 6.9
billion from Ps. 3.3 billion in 2003. Money transfer revenues grew 20.1% YoY,
from Ps. 743.1 million in 2003 to Ps. 892.5 million in 2004. Lastly, other
income revenues decreased 55.0% YoY to Ps. 835.6 million from Ps. 1.9 billion
in 2003. The decrease is due to the fact that at the end of 2003, there was
still a balance left from our credit operations granted before October 30,
2002, thus making the base of comparison higher when compared to 2004.
EBITDA and Operating Profit
Consolidated EBITDA was a record for a fourth quarter as it increased 21.4%
YoY, from Ps. 1.1 billion in 4Q03 to Ps. 1.3 billion in 4Q04. EBITDA growth is
largely attributable to increased consolidated revenues and gross profit,
despite a 15.3% increase YoY in selling, general and administrative expenses.
The increase in operating expenses was mainly a result of the compensation
based on contribution of our sales force, collections personnel, cashiers,
credit executives and all employees with a direct interaction with clients, the
amortization of preoperative expenses during the quarter from our two new
businesses units, Afore Azteca and Seguros Azteca, hiring and training of new
employees for our new stores and financial division business units, our
door-to-door sales force for retailing, the mobile sales force of the financial
division, and expenses associated with our store and bank branch expansion
program. This is reflected in the 15.6% YoY increase in headcount, from 24,328
employees at the end of 4Q03 to 28,121 employees in 4Q04.
Operating income increased by 0.5% YoY as depreciation and amortization
expenses increased 92.3% YoY. This increase is attributable to the growth in
fixed assets in both the retail and financial division due to our expansion,
remodeling and relocation plans.
EBITDA & Operating Profit
Ps. Million Change Change
4Q03 4Q04 $ % 2003 2004 $ %
EBITDA 1,081 1,312 231 21.4% 3,629 4,106 477 13.1%
Operating Profit 863 868 5 0.5% 2,576 2,890 314 12.2%
Consolidated EBITDA for 2004 was also a record high at Ps. 4.1 billion, 13.1%
above the Ps. 3.6 billion of 2003. Notwithstanding an increase in operating
expenses of 24.8% YoY, from Ps. 6.0 billion to Ps. 7.5 billion in 2004,
operating income grew 12.2% YoY to Ps. 2.9 billion from Ps. 2.6 billion in
2003. Depreciation and amortization expenses increased 16.0% over the same
period due to equipment purchased for our new and remodeled or relocated stores
and our new bank branches opened YoY.
Net Income
Our solid operating performance, coupled with an 63.0% YoY decrease in the
comprehensive cost of financing, as well as a Ps. 55.0 million gain from our
equity participation in Comunicaciones Avanzadas, led to record net income of
Ps. 670.7 million in 4Q04, 56.8% higher than the Ps. 427.9 million net income
of 4Q03.
Consolidated record net profit for the full year was Ps. 1.9 billion, 59.5% YoY
higher than the net profit reported in 2003 of Ps. 1.2 million. Our
participation in Comunicaciones Avanzadas resulted in a gain of Ps. 72.5
million in 2004.
Net Income
Ps. Million Change
4Q03 4Q04 $ %
Total Net Income 428 671 243 56.8%
EPS (Peso Per Share)(1) 1.79 2.82 1.03 57.7%
EPS (US$ Per ADR)(1)* 0.64 1.01 0.37 57.7%
(1) Calculation based on 239,378,000
Elektra* (59,845,000 ADR equivalent)
weighted average at December 31,
2003 and 237,957,000 Elektra*
(59,489,000 ADR equivalent)
weighted average outstanding at
December 31, 2004
*Ps. 11.15 per US$
Ps. Million Change
2003 2004 $ %
Total Net Income 1,202 1,917 715 59.5%
EPS ( Peso Per Share )(1) 5.02 8.06 3.04 60.5%
EPS (US$ Per ADR)(1)* 1.80 2.89 1.09 60.5%
(1) Calculation based on
239,378,000 Elektra*
(59,845,000 ADR equivalent)
weighted average at December 31,
2003 and 237,957,000 Elektra*
(59,489,000 ADR equivalent)
weighted average outstanding at
December 31, 2004
*Ps. 11.15 per US$
Retail Division Highlights
During 2004, Grupo Elektra opened 100 new Elektra stores in Mexico, 11 new
Elektra stores in Latin America, and relocated or remodeled another 53 Elektra
stores in Mexico, Guatemala and Honduras. Also through the year, we closed 12
Salinas y Rocha stores and 5 Bodega de Remates stores that did not meet our
profitability standards.
In addition, during the quarter we operated 34 stores under our new Elektricity
store format, which targets a higher income segment of the population than
previously served by Grupo Elektra by offering high-tech electronics and other
brands not currently offered in our other store formats.
Furthermore, our Latin American operations (Guatemala, Honduras and Peru)
continue showing excellent results. During the 4Q04, revenues and gross
profits in this region registered YoY increases of 47.3% and 35.2%,
respectively. For 2004, revenues and gross profit grew by 47.8% and by 43.1%
YoY, respectively.
Finally, during the fourth quarter, Grupo Elektra launched the Empresario
Azteca program and the Asociacion del Empresario Azteca in conjunction with
Banco Azteca to finance, assist and help entrepreneurs who are looking to start
up or to expand small businesses. This program and its association aim to help
strengthen Mexico's economic growth by nurturing small businesses throughout
the country. Empresario Azteca is comprised of three pillars:
1. The financing of working capital needs and equipment purchases through Banco
Azteca;
2. The procurement capabilities and extensive store network of Grupo Elektra;
and
3. The Asociacion del Empresario Azteca to provide support, assistance and
consulting to all its members.
Other highlights in the Retail Division include:
Dinero Express, our intra-Mexico electronic money transfer business, continues
with excellent results from its successful marketing efforts. These are
reflected in an increase in revenues of 24.3% YoY to Ps. 109.3 million in the
4Q04 from Ps. 87.9 million in the 4Q03. Also during the quarter, we
transferred the equivalent of Ps. 1.6 billion through 1.4 billion transactions,
representing YoY increases of 47.2% and 37.3%, respectively. For the year,
revenues increased 29.6% to Ps. 388.6 million from Ps. 299.8 million in 2003.
This result was led by increases in the amount transferred and number of
transactions of 43.5% and 35.1% YoY, respectively.
Revenues from our agency relationship with Western Union increased 4.1% YoY to
Ps. 127.3 million in the 4Q04 from Ps. 122.3 million in the 4Q03. Revenues were
boosted by a 28.2% growth in the number of transfers and by a 41.9% growth in
the amount transferred. We have further strengthened our relationship with
Western Union and now offer electronic money transfer service from Mexico to
the US and the rest of the world. For the year, revenues increased 13.7% to
Ps. 504.0 million from Ps. 443.3 million in 2003. During the same period, the
amount transferred and the number of transactions increased by 42.1% and by
28.0%, respectively.
Banco Azteca
On October 30, 2004, Banco Azteca celebrated two years of offering banking
products and services to the vast majority of the Mexican population, as well
as outstanding results beyond our expectations in many areas. The synergies
created between the retail and financial divisions have made Banco Azteca the
fastest growing bank in Mexico.
For 4Q04, Banco Azteca reported net income of Ps. 36.0 million, 67.6% lower
than the net income of Ps. 111.0 million for 4Q03. The 74.4% YoY increase in
financial revenues was offset by interest expense on deposits and funding,
loan-loss provisions, and operating expenses.
In addition, Banco Azteca launched "Comercializadora" or mobile sales force
that has the mandate to attract new customers and companies for Banco Azteca
and also provides services to Seguros Azteca and Afore Azteca.
During 4Q04, Grupo Elektra made a Ps. 410.0 million infusion into Banco Azteca,
which shareholder's equity reached Ps.1,046.0 million. This is attributable to
the excellent performance and growth achieved by Banco Azteca, above
expectations.
As of December 31, 2004, the estimated capitalization index of Banco Azteca was
11.2%, compared to 10.9% on September 30, 2004, and 11.3% on December 31, 2003.
All the figures exceed the 8.0% minimum capitalization index required by
Mexican regulators.
For 4Q04, the average funding cost of Banco Azteca was 3.8%, 30 basis points
higher when compared to the average funding mix registered in 3Q04, and 60
basis points above the cost reported in 4Q03. The YoY increase in the funding
cost is explained by the 2.3 times growth of deposits in Inversion Azteca from
Ps. 5.0 billion in 2003 to Ps. 11.8 billion in 2004.
Credimax Consumo (Consumer Loans) and Credimax Efectivo (Personal Cash Loans)
Combined Credit Portfolio.
As of December 31, 2004, Credimax Consumo and Credimax Efectivo continued to be
our two main financing products as they accounted for 72.3% of our total gross
loan portfolio. During the quarter we launched the student loan product for
undergraduate studies at the Universidad ICEL (Credimax Estudiantil) and
Credimax Empresario Azteca in connection with the launching of Empresario
Azteca. Going forward, we will continue pilot-testing different credit
products and cautiously analyzing the risks associated with them in our efforts
to continue expanding our array of credit products for our customers.
At the end of 4Q04, we had a total of 4.1 million active accounts, representing
a 13.9% QoQ increase from the 3.6 million accounts in 3Q04 and a 36.7% YoY
increase over the same period of last year. The gross loan portfolio increased
19.4% QoQ, reaching Ps. 11.3 billion from Ps. 9.5 billion at the end of 3Q04.
Our gross credit portfolio grew 100.9% YoY from Ps. 5.6 billion in 4Q03. The
average term of the combined credit portfolio at the end of the 4Q04, was 54
weeks, representing an increase of 3 weeks when compared to 4Q03 and flat when
compared to 3Q04. Personal loans represented 16.4% of the gross credit
portfolio at the end of 4Q04, showing 70 basis points decrease when compared to
17.1% at the end of 3Q04. The collection rate of Banco Azteca continues at the
same excellent historic level that defines Grupo Elektra's standard, about 98%
as of December 31, 2004.
Guardadito (Savings Accounts) and Inversion Azteca (Term Deposits).
Net deposits increased 12.9% QoQ, from Ps. 15.4 billion in 3Q04 to Ps. 17.4
billion in 4Q04, and they increased 100.2% YoY the net deposits of 4Q03. Over
the quarter, the total number of accounts rose by approximately 600,000 to 5.6
million.
Afore Azteca
For 4Q04, Afore Azteca reported a net loss of Ps. 24.2 million from a net
income of Ps. 3.2 million for 4Q03. YoY, net income for 2004 increased to Ps.
11.0 million from a net loss of Ps. 10.0 million registered in 2003. This
result is mainly attributable to the amortization of Ps. 29.0 million of
preoperating expenses during the quarter. On a proforma basis, excluding the
amortization of these expenses, Afore Azteca would have registered a net income
of Ps. 5.0 million during 4Q04, and Ps. 40.0 million during 2004
As of December 31, 2004, Siefore Azteca reached Ps. 2.7 billion in net assets
under management, a 31.9% increase over the previous quarter, and yielded a
7.65% return in the 4Q04, 71 basis points above the average rate of the
industry of 6.94% and 41 basis points above the previous quarter.
The number of affiliates reached 79,500 and the number of assignees was
743,000, both as of December 31, 2004. YoY, the affiliate base increased 84.3%
mainly because of transfers among the Afore system in Mexico and by the CONSAR
(National Commission of the Retirement Fund System) that took place during the
year. These new affiliates were distributed among the three Afores of the
system that charge the lowest commissions.
New regulation in the Afore business related to the affiliate base was approved
at the end of 2004. Starting 2005, an affiliate can move to a cheaper Afore at
any time he or she wants but if he or she wants to move to a more expensive
one, he or she has to wait at least one year as it was restricted for everybody
in the former law. This new criteria applies for both workers assigned by
Banco de Mexico and transfers among the Afore system. Afore Aztea is ranked as
the second most affordable Afore in the system and both, this new law and our
"Comercializadora" mobile-sale force initiative, will enhance the opportunity
to increase our affiliate base.
Seguros Azteca
During the fourth quarter, Seguros Azteca showed a strong performance, as about
75% of customers acquired term life insurance along with either a consumer or
personal loan from Banco Azteca. As a result of this success, we increased the
weekly premiums up to Ps. 15 and Ps. 20 to acquire a Vidamax life insurance
policy, thus increasing the benefit for customers in case of natural or
accidental death. Finally, also during the quarter, Seguros Azteca started to
pilot-test its Vidamax life insurance policy on financed purchases of mobile
phone products sold at our stores.
For 4Q04, Seguros Azteca recorded positive net income for the third quarter in
a row, with Ps. 4.5 million, reaching Ps. 9.0 million for 2004. Net income for
4Q04 was 52.2% lower than the Ps. 6.8 million from the previous quarter. This
is largely attributable to the amortization of Ps. 28.0 million of preoperating
expenses during the quarter. On a proforma basis, excluding the amortization
of these expenses, Seguros Azteca would have registered a net income of Ps.
32.5 million during 4Q04, and Ps. 36.0 million for 2004.
Seguros Azteca will continue pilot testing other insurance products in line
with the products and services offered by Banco Azteca.
Financial Condition (Consolidated Balance Sheet)
To continue maintaining clarity in regards to our consolidated balance sheet,
in the following we discuss certain items included on a separated basis.
Total cash and cash equivalents rose to Ps. 13.4 billion in 4Q04 from Ps. 7.5
billion in 4Q03, comprised of Ps. 4.6 billion from the retail division and Ps.
8.8 billion from Banco Azteca. The retail division cash and equivalents
registered an increase of 10.0% YoY when compared to 4Q03. Cash and
equivalents from the Financial Division increased 160% or by Ps. 5.4 billion
over the same period a year ago.
Banco Azteca's gross credit portfolio increased 100.9% YoY to Ps. 11.3 billion
in 4Q04 from Ps. 5.6 billion at the end of 4Q03. The retail division's
customer accounts receivables, now comprised only from our credit operations in
Latin America, is starting to show encouraging results as they increased 36.8%
YoY to Ps. 568.4 million in 4Q04 from Ps. 415.5 million in 4Q03.
At the end of 4Q04, total debt with cost at the retail division was Ps. 3.7
billion, 7.9% lower when compared to Ps. 4.0 billion at the end of 4Q03, and
4.2% lower when compared to Ps. 3.9 billion of 3Q04. Net debt at the retail
division decreased YoY, from negative Ps. 138.1 million in 4Q03 to negative Ps.
868.9 million in 4Q04.
For 4Q04, total net deposits for Banco Azteca increased 12.9% QoQ to Ps. 17.4
billion from Ps. 15.4 billion at the end of 3Q04. Year-over-year, deposits
increased 100.2% from Ps. 8.7 billion in 4Q03.
Consolidated equity grew 31.4% YoY, from Ps. 6.4 billion in 4Q03 to Ps. 8.4
billion in 4Q04, largely as a result of the 55.0% YoY increase in net income.
We invite you to visit our award-winning corporate website at
http://www.grupoelektra.com.mx/
Except for historical information, the matters discussed in this press release
are forward-looking statements and are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Risks that may affect Grupo Elektra are identified in its Form 20-
F and other filings with the US Securities and Exchange Commission.
As used in this press release, EBITDA is operating income (loss) before
interest expense, taxes, depreciation and amortization, and adjusted by
eliminating monetary (loss) gain included in our revenues and cost,
respectively. In accordance with Regulation G, issued by the U.S. Securities
and Exchange Commission, reconciliation between net income and EBITDA is
provided in the notes provided in our financial statements. EBITDA is
presented because of the following reasons:
* Our management uses EBITDA as a measure of performance business allowing
us to compare ourselves with our peers' multiples, ratios and margins
derived from EBITDA. It also serves to evaluate and compensate certain
employees.
* We believe EBITDA is one of the tools that we can use to measure our
cash-flow generation, because it excludes some non-cash items as
monetary gains or losses, depreciation and amortization, etc.
* EBITDA is also a measure contained in certain financial covenants of our
debt, and consequently we are required to calculate it in order to
verify compliance with such covenants.
* We are aware that EBITDA has material limitations associated with its
use, (i.e., EBITDA, as defined by us, excludes items such as
Discontinued operations, and includes the Allowance for doubtful
accounts, which contains or does not contain, respectively, portions of
cash). However, our management compensates these material limitations
with the use of our consolidated financial statements and its notes.
* We believe that EBITDA is used by certain investors as one measure of a
company's historical ability to service its debt.
EBITDA should not be considered in isolation or as a substitute for the
consolidated income statements or the consolidated statements of changes in
financial position prepared in accordance with Mexican GAAP (PCGA) or as a
measure of profitability or liquidity. EBITDA is not (a) a measure determined
under PCGA or U.S. GAAP, (b) an alternative to PCGA or U.S. GAAP operating
income (loss) or net income (loss), (c) a measure of liquidity or cash flows as
determined under PCGA or U.S. GAAP or (d) a measure provided in order to smooth
earnings. EBITDA does not represent discretionary funds. EBITDA, as calculated
by us, may not be comparable to similarly titled measures reported by other
companies.
Grupo Elektra - Tradition with Vision
Grupo Elektra is Latin America's leading specialty retailer, consumer finance
and banking services company. Grupo Elektra sells retail goods and services
through its Elektra, Salinas y Rocha, Bodega de Remates and Elektricity stores
and over the Internet. The Group operates more than 1,000 stores in Mexico,
Guatemala, Honduras and Peru. Grupo Elektra also sells and markets its
consumer finance, banking and financial products and services through its Banco
Azteca branches located within its stores and in other channels. Banking and
financial services include consumer credit, personal loans, money transfers,
extended warranties, savings accounts, term deposits, pension-fund management
and insurance.
Investor and Press Inquiries:
Esteban Galindez, CFA
Director of Finance & IR
Grupo Elektra, S.A. de C.V.
Tel. +52 (55) 1720-7819
Fax. +52 (55) 1720-7822
Rolando Villarreal
Head of Investor Relations
Grupo Elektra S.A. de C.V.
Tel. +52 (55) 1720-7819
Fax. +52 (55) 1720-7822
Samantha Pescador
Investor Relations
Grupo Elektra S.A. de C.V.
Tel. +52 (55) 1720-7819
Fax. +52 (55) 1720-7822
DATASOURCE: Grupo Elektra S.A. de C.V.
CONTACT: Esteban Galindez, CFA, Director of Finance & IR, Grupo Elektra,
S.A. de C.V., Tel. +52-55-1720-7819, or Fax, +52-55-1720-7822, or
; or Rolando Villarreal, Head of Investor Relations,
Grupo Elektra S.A. de C.V., Tel. +52-55-1720-7819, or Fax, +52-55-1720-7822,
or ; or Samantha Pescador, Investor Relations, Grupo
Elektra S.A. de C.V., Tel. +52-55-1720-7819, or Fax, +52-55-1720-7822, or
Web site: http://www.grupoelektra.com.mx/