—Solid dynamism in consolidated bank deposits; growing 15% to Ps.82,363 million—
—Continued increase of gross loan portfolio; 5% expansion to Ps.76,828 million—
—Strategies to further strengthen financial and commercial businesses are expected to translate into future yields—
MEXICO CITY, April 29, 2014 (GLOBE NEWSWIRE) -- Grupo Elektra, S.A.B. de C.V. (BMV: ELEKTRA*; Latibex: XEKT), Latin America's leading specialty retailer and financial services company and the largest non-bank provider of cash advance services in the United States, reported today its financial results for the first quarter of 2014.
Consolidated first quarter results
Consolidated revenue was Ps.17,257 million, compared to Ps.17,453 million for the same period last year. Costs and operating expenses were Ps.14,695 million from Ps.14,399 million for the same period of 2013.
Grupo Elektra reported EBITDA of Ps.2,562 million, compared to Ps.3,054 million for the previous year's quarter; EBITDA margin was 15% this quarter. The company reported a net loss of Ps.175 million, from a net loss of Ps.582 million a year ago.
| 1Q 2013 | 1Q 2014 | Change | ||
| Ps. | % | |||
| Consolidated revenue | $17,453 | $17,257 | $(196) | -1% |
| EBITDA | $3,054 | $2,562 | $(492) | -16% |
| Net result | $(582) | $(175) | $407 | 70% |
| Net result per share | $(2.45) | $(0.74) | $1.71 | 70% |
Figures in millions of pesos
As of March 31, 2013, Elektra outstanding shares were 237.2 million and as of March 31, 2014, were 237.3 million.
Revenue
Consolidated revenue fell 1%, as a result of a reduction of 2% in financial revenue and a 1% increase in commercial sales.
Financial revenue grew to Ps.12,103 million, from Ps.12,364 million last year, in line with the performance of Banco Azteca Mexico income that totaled Ps.8,251 million from Ps.8,262 million in the same quarter a year ago.
The increase in commercial revenue comes from growing customer satisfaction, through an optimal mix of merchandise on the sales floor, which is offered in the most competitive market conditions. This, together with actions to further strengthen service in the store, will drive additional merchandise business.
Costs and expenses
Consolidated costs for the quarter increased 5% to Ps.7,060 million, from Ps.6,750 million from the previous year. The change mainly derives from a 14% increase in financial cost —to Ps.3,598 million compared to Ps.3,153 million a year ago— and a 4% reduction in commercial cost.
The change in financial cost mainly resulted from the creation of loan loss reserves—in the context of growth of the consolidated portfolio; as well as more interest paid to savers, as a result of a strong increase in traditional deposits.
Consolidated operating expenses were Ps.7,635 million, practically without change when compared to Ps.7,649 million for the same quarter of the previous year.
EBITDA and net result
Consolidated EBITDA was Ps.2,562 million, compared to Ps.3,054 million a year ago; the EBITDA margin for the quarter was 15%.
The most significant change below EBITDA was a positive Ps.613 million in other financial results, as a consequence of a lesser decrease in the market value of the underlying assets of financial instruments owned by the company –which does not imply cash flow–compared to last year.
Grupo Elektra reported net loss of Ps.175 million, from net loss of Ps.582 million a year ago.
Consolidated balance sheet
Loan portfolio and deposits
Banco Azteca Mexico, Advance America —the largest non-bank provider of cash advance services in the US— and Banco Azteca Latin America's consolidated gross portfolio as of March 31, 2014, was Ps.76,828 million, 5% higher than the Ps.73,400 million the previous year, a result of the preference of customers for our credit products, which directly improve quality of life. Consolidated delinquency rate was 8.3% at the end of the period, from 8.4% a year ago.
The gross portfolio of Banco Azteca Mexico was Ps.62,961 million, compared to Ps.62,273 million a year ago. The delinquency rate of Banco Azteca Mexico at the end of the quarter was 8.5%. The non-performing loan portfolio is reserved 1.3 times. The average term of the credit portfolio for principal credit lines –consumer, personal loans and Tarjeta Azteca– was 61 weeks at the end of the first quarter.
The Advance America loan portfolio was Ps.3,310 million, 8% higher than the Ps.3,060 million a year ago. More dynamism in the operations of the company is expected with the successful launch of title loans in a growing number of points of sale in the U.S.
Grupo Elektra consolidated deposits grew 15%, to Ps.82,363 million, compared to Ps.71,717 million a year ago. Deposits of Banco Azteca Mexico were Ps.76,405 million, 8% higher from Ps.70,594 million a year ago.
Financial products that satisfy clients in the best way, with world class service, resulted in the increase in deposits and credit portfolios, which anticipate strong future yields.
As of March 31, 2014, the capitalization index of Banco Azteca Mexico was 13.4%. The company considers the index to be at a level that optimizes equity profitability.
Debt
As of March 31, 2014, consolidated total debt with cost was Ps.22,444 million, of which Ps.18,060 million correspond to the commercial business, and Ps.4,384 million to the financial business.
The balance of cash, cash equivalents and marketable securities for the commercial business was Ps.15,446 million at the end of the period; as a result, net debt for the commercial business was Ps.2,614 million.
Expansion
Grupo Elektra currently has 6,849 points of sale, 4% more than 6,580 from a year ago; the change comes from the addition of 327 Blockbuster stores during the period.
As previously announced, the company acquired 100% of the shares of Blockbuster Mexico on January 2014, which added points of sale to the distribution network of Grupo Elektra. The Blockbuster stores are located in 108 cities throughout the country, mainly located in the B and C demographic areas, which will expand the customer base of the company. In the new locations, Grupo Elektra plans to offer commercial products, in addition to strengthening its current financial services platform, and promote the transformation of the digital entertainment distribution network.
Grupo Elektra has 3,781 points of sale in Mexico, 2,446 in the United States, and 622 in Central and South America. The wide distribution network allows the company to keep its proximity and closeness to clients; granting superior market positioning in the countries where it operates.
Company Profile:
Grupo Elektra (www.grupoelektra.com.mx) is Latin America's leading financial services company and specialty retailer and the largest non-bank provider of cash advance services in the United States. The Group operates over 6,000 points of sale in Mexico, USA, Brazil, Guatemala, Honduras, Peru, Panama and El Salvador.
Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value, contributing to build the middle class of the countries in which they operate and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com), Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. The companies include Azteca (www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Advance America (www.advanceamerica.net), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx) and Grupo Iusacell (www.iusacell.com.mx). Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, the member companies share a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.
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. Other risks that may affect Grupo Elektra and its subsidiaries are identified in documents sent to securities authorities.
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| CONSOLIDATED INCOME STATEMENTS | ||||||
| MILLIONS OF MEXICAN PESOS | ||||||
| 1Q13 | 1Q14 | Change | ||||
| Financial income | 12,364 | 71% | 12,103 | 70% | (261) | -2% |
| Commercial income | 5,088 | 29% | 5,154 | 30% | 65 | 1% |
| Income | 17,453 | 100% | 17,257 | 100% | (196) | -1% |
| Financial cost | 3,153 | 18% | 3,598 | 21% | 445 | 14% |
| Commercial cost | 3,597 | 21% | 3,463 | 20% | (134) | -4% |
| Costs | 6,750 | 39% | 7,060 | 41% | 310 | 5% |
| Gross income | 10,703 | 61% | 10,197 | 59% | (506) | -5% |
| Sales, administration and promotion expenses | 7,649 | 44% | 7,635 | 44% | (14) | 0% |
| Depreciation and amortization | 656 | 4% | 656 | 4% | (0) | 0% |
| Operating expenses | 8,304 | 48% | 8,290 | 48% | (14) | 0% |
| Operating income | 2,398 | 14% | 1,906 | 11% | (492) | -21% |
| EBITDA | 3,054 | 17% | 2,562 | 15% | (492) | -16% |
| Comprehensive financial result: | ||||||
| Interest income | 49 | 0% | 128 | 1% | 79 | -- |
| Interest expense | (420) | -2% | (378) | -2% | 42 | 10% |
| Foreign exchange (loss) gain, net | (368) | -2% | 83 | 0% | 451 | -- |
| Other financial results, net | (2,601) | -15% | (1,988) | -12% | 613 | 24% |
| (3,340) | -19% | (2,155) | -12% | 1,185 | 35% | |
| Other income (expense), net | 9 | 0% | (6) | 0% | (16) | -- |
| Participation in the net income of | ||||||
| CASA and other associated companies | (2) | 0% | (37) | 0% | (35) | -- |
| Loss before income tax | (934) | -5% | (291) | -2% | 643 | 69% |
| Income tax | 363 | 2% | 116 | 1% | (247) | -68% |
| Loss before discontinued operations | (571) | -3% | (175) | -1% | 396 | 69% |
| Loss from discontinued operations | (11) | 0% | -- | 0% | 11 | -- |
| Consolidated net loss | (582) | -3% | (175) | -1% | 407 | 70% |
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEET | ||||||||
| MILLIONS OF MEXICAN PESOS | ||||||||
| Commercial Business | Financial Business | Grupo Elektra | Commercial Business | Financial Business | Grupo Elektra | Change | ||
| At March 31, 2013 | At March 31, 2014 | |||||||
| Cash and cash equivalents | 3,819 | 15,475 | 19,294 | 2,983 | 18,069 | 21,052 | 1,758 | 9% |
| Marketable financial instruments | 23,154 | 13,002 | 36,156 | 12,463 | 20,870 | 33,333 | (2,823) | -8% |
| Performing loan portfolio | 224 | 49,675 | 49,898 | -- | 50,277 | 50,277 | 378 | 1% |
| Total past-due loans | 263 | 5,353 | 5,616 | -- | 6,194 | 6,194 | 578 | 10% |
| Gross loan portfolio | 487 | 55,028 | 55,515 | -- | 56,471 | 56,471 | 956 | 2% |
| Allowance for credit risks | 264 | 8,055 | 8,319 | -- | 8,735 | 8,735 | 416 | 5% |
| Loan portfolio, net | 223 | 46,973 | 47,196 | -- | 47,737 | 47,737 | 540 | 1% |
| Inventories | 7,071 | 7,071 | 6,139 | 6,139 | (931) | -13% | ||
| Other current assets | 9,299 | 8,295 | 17,593 | 3,358 | 8,166 | 11,524 | (6,069) | -34% |
| Total current assets | 43,565 | 83,745 | 127,310 | 24,943 | 94,841 | 119,785 | (7,526) | -6% |
| Financial instruments | -- | -- | -- | 10,507 | 200 | 10,708 | 10,708 | -- |
| Performing loan portfolio | 236 | 17,128 | 17,364 | 20,142 | 20,142 | 2,778 | 16% | |
| Total past-due loans | 1 | 520 | 521 | 215 | 215 | (306) | -59% | |
| Loan portfolio | 237 | 17,648 | 17,885 | -- | 20,357 | 20,357 | 2,472 | 14% |
| Other non-current assets | 844 | 168 | 1,013 | 4,385 | 2 | 4,387 | 3,374 | -- |
| Investment in shares | 3,893 | -- | 3,893 | 4,240 | 4,240 | 347 | 9% | |
| Property, furniture, equipment and | ||||||||
| investment in stores, net | 4,087 | 2,862 | 6,949 | 4,765 | 2,897 | 7,662 | 713 | 10% |
| Intangible assets | 544 | 6,295 | 6,839 | 623 | 6,615 | 7,239 | 399 | 6% |
| Other assets | 760 | 387 | 1,148 | 1,024 | 614 | 1,637 | 489 | 43% |
| TOTAL ASSETS | 53,932 | 111,105 | 165,037 | 50,488 | 125,526 | 176,014 | 10,977 | 7% |
| Demand and term deposits | 71,717 | 71,717 | 82,363 | 82,363 | 10,646 | 15% | ||
| Creditors from repurchase agreements | 2,709 | 2,709 | 3,490 | 3,490 | 782 | 29% | ||
| Short-term debt | 9,163 | 2,872 | 12,036 | 4,150 | 518 | 4,668 | (7,367) | -61% |
| Short-term liabilities with cost | 9,163 | 77,299 | 86,462 | 4,150 | 86,372 | 90,522 | 4,060 | 5% |
| Suppliers and other short-term liabilities | 6,798 | 6,124 | 12,922 | 8,578 | 6,637 | 15,215 | 2,293 | 18% |
| Short-term liabilities without cost | 6,798 | 6,124 | 12,922 | 8,578 | 6,637 | 15,215 | 2,293 | 18% |
| Total short-term liabilities | 15,961 | 83,422 | 99,384 | 12,728 | 93,009 | 105,737 | 6,353 | 6% |
| Long-term debt | 10,633 | 1,112 | 11,745 | 13,910 | 3,866 | 17,776 | 6,031 | 51% |
| Long-term liabilities with cost | 10,633 | 1,112 | 11,745 | 13,910 | 3,866 | 17,776 | 6,031 | 51% |
| Long-term liabilities without cost | 8,562 | 949 | 9,511 | 5,757 | 1,259 | 7,016 | (2,495) | -26% |
| Total long-term liabilities | 19,196 | 2,060 | 21,256 | 19,667 | 5,124 | 24,791 | 3,536 | 17% |
| TOTAL LIABILITIES | 35,157 | 85,482 | 120,640 | 32,395 | 98,133 | 130,528 | 9,889 | 8% |
| TOTAL STOCKHOLDERS' EQUITY | 18,775 | 25,623 | 44,397 | 18,093 | 27,393 | 45,486 | 1,088 | 2% |
| LIABILITIES + EQUITY | 53,932 | 111,105 | 165,037 | 50,488 | 125,526 | 176,014 | 10,977 | 7% |
| GRUPO ELEKTRA, S.A.B. DE C.V. AND SUBSIDIARIES | ||||||
| INFRASTRUCTURE | ||||||
| 1Q13 | 1Q14 | Change | ||||
| Points of sale in Mexico | ||||||
| Elektra (1) | 967 | 15% | 988 | 14% | 21 | 2% |
| Salinas y Rocha (1) | 55 | 1% | 55 | 1% | -- | 0% |
| Freestanding branches | 2,387 | 36% | 2,411 | 35% | 24 | 1% |
| Blockbuster | -- | 0% | 327 | 5% | 327 | 100% |
| Total | 3,409 | 52% | 3,781 | 55% | 372 | 11% |
| Points of sale in Central and South America | ||||||
| Elektra (1) | 217 | 3% | 215 | 3% | (2) | -1% |
| Freestanding branches | 447 | 7% | 407 | 6% | (40) | -9% |
| Total | 664 | 10% | 622 | 9% | (42) | -6% |
| Points of sale in North America | ||||||
| Advance America | 2,507 | 38% | 2,446 | 36% | (61) | -2% |
| Total | 2,507 | 38% | 2,446 | 36% | (61) | -2% |
| TOTAL | 6,580 | 100% | 6,849 | 100% | 269 | 4% |
| (1) Each store has a Banco Azteca branch. | ||||||
| Floor space (m²) | ||||||
| Elektra Mexico | 836,259 | 51% | 843,900 | 48% | 7,640 | 1% |
| Elektra Central and South America | 156,125 | 10% | 151,891 | 9% | (4,234) | -3% |
| Salinas y Rocha | 58,995 | 4% | 58,995 | 3% | -- | 0% |
| Freestanding branches | 246,437 | 15% | 241,389 | 14% | (5,048) | -2% |
| Advance America | 343,500 | 21% | 335,142 | 19% | (8,358) | -2% |
| Blockbuster | -- | 0% | 110,000 | 6% | 110,000 | 100% |
| TOTAL | 1,641,316 | 100% | 1,741,316 | 100% | 100,000 | 6% |
| Employees | ||||||
| Mexico | 59,278 | 76% | 67,516 | 79% | 8,238 | 14% |
| Central and South America | 12,610 | 16% | 11,327 | 13% | (1,283) | -10% |
| North America | 6,348 | 8% | 6,666 | 8% | 318 | 5% |
| Total employees | 78,236 | 100% | 85,509 | 100% | 7,273 | 9% |