Monterrey-based automotive parts manufacturer Nemak posted fourth quarter net income of US$38 million, up 5.6% compared to same period of 2017, despite a drop on total revenue. Full-year net income totaled US$180 million, down 6.3%.
Nemak sold 11.5 million equivalent units (MEU) in the last quarter of 2018, down 4.2% year-on-year. While volumes were flat in North America, Europe and the rest of the World operations showed a decline.
Fourth quarter revenues amounted to US$1.08 billion, down 1.5%, mainly due to lower volumes. However, full-year 2018 volume was slightly higher than the previous year due to higher sales in North America, and revenues were 5.0% higher to US$4.7 billion mainly due to better average pricing.
Fourth quarter EBITDA was US$171 million, up 3% year-on-year. This figure derived from efficiencies and onetime effects associated with a customer settlement and certain reclassifications, which combined, more than compensated for the impact of lower volumes and higher energy expenses.
Full-year 2018 EBITDA was US$734 million, 2.7% higher than the year before due mainly to a combination of efficiencies, a better product mix, and the factors which benefited the quarterly result.
Capital expenditures amounted to US$132 million during fourth quarter for a full year amount of US$403 million. During the quarter, Nemak focused on making investments to support new product launches across its main business lines.
“In 2018 we performed better than the previous year, successfully leveraging operational efficiencies and a better product mix to deliver EBITDA growth of 3%,” said in a statement Nemak CEO Armando Tamez.
Europe accounted for most of the difference, aided by the ramp-up of new business in propulsion as well as vehicle structures applications.
During last quarter, the structural and electric vehicle components (SC/EV) business won new contracts to supply complex assembled battery housings and body-in-white components as well as highly integrated e-motor housings.
For the full year, Nemak won contracts to produce SC/EV worth US$280 million, bringing the total value of contracts won to-date in the segment to approximately US$600 million annually.