Vitro’s earnings increase 62% boosted by recent acquisitions in the US
Nuevo Leon-based glass manufacturer Vitro announced solid results for the third quarter of 2017 driven by growth in the Flat Glass Division (VFG), reflecting the recent acquisitions of PPG’s Flat Glass Division and PGW’s Original Equipment unit, but also supported by the good performance of its traditional businesses.
Consolidated earnings before interest and taxes (EBIT) increased 62.0% to US$ 74 million primarily as a result of the integration of the recently acquired businesses in the US, as well as higher sales volumes and an improved product mix in our ongoing businesses in Mexico and rest of the world.
Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) was 80.6% higher this quarter reaching to US$ 103 million, US$ 87 million in the Flat Glass division mainly from the recent acquisitions and US$ 17 million in the Glass Container division. However, EBITDA margin decreased 740 basis points to 18.5% following the recent acquisition of the Automotive Business in the US. This acquisition positioned Vitro as a leader in North America in their segment.
Consolidated Net Sales rose 153.5% year-over-year (YoY) during the third quarter of 2017 to US$ 556 million. This was led by the 208.4% YoY increase in revenues in the Flat Glass division to US$ 497 million for the quarter, notwithstanding the outage of two of Vitro’s flat glass furnaces in Carlisle, Pennsylvania.
The company experienced an unexpected incident which resulted in a complete shut down and repairs at Carlisle, which is an important plant of Vitro’s Architectural Glass Business. Vitro said it expected to avoid material impact in its results thanks to an insurance policy that cover this kind of events. One furnace is already back in operation, while the second is expected to remain idle for an extended period of time as it requires more extensive repairs.
Revenues for the Glass Container unit, were essentially flat at US$ 57 million, as a result of weak demand for machinery and equipment products (FAMA), partially offset by an increase in Fragrances and Pharmaceutical sales.
“We reported a solid performance this quarter with top line and EBITDA growth mainly reflecting the positive impact from the recent acquisitions in the Flat Glass division along with organic growth,” Adrian Sada Cueva, Vitro’s Chief Executive Officer said.
“Our results this year have also benefited from new Automotive OEM platforms in Mexico that have come into production over the past year. Additionally, our recently opened plant for the Automotive Replacement Glass business is positively contributing to sales. On the other hand, we are beginning to experience increased competition in some of our segments as well as some slowdown in automotive demand in the United States,” he warned.