SAN PEDRO GARZA GARCIA, Nuevo Leon, Mexico, Oct. 28 /PRNewswire-FirstCall/ -- Vitro S.A.B. de C.V. (BMV: VITROA) one of the world''s largest producers and distributors of glass products, today announced 3Q''09 unaudited results. Year-over-year consolidated net sales declined 36.9 percent affected by a 25 percent peso depreciation during last twelve months, lower volumes and the deconsolidation in December 2008 of Comegua - the Company''s glass container venture in Central America. Consolidated EBITDA decreased 36.7 percent YoY while the consolidated EBITDA margin of 14.5 percent remained without change from the same period last year. On a comparable basis, excluding Comegua, consolidated net sales during 3Q''09 declined 31.7 percent YoY while EBITDA decreased 31.5 percent during the same period.
FINANCIAL HIGHLIGHTS* 3Q''09 3Q''08 % Change ----------------------- Consolidated Net Sales 457 724 -36.9% Glass Containers 241 404 -40.3% Flat Glass 213 314 -32.3% Cost of Sales 322 523 -38.3% ------ ------ ------ Gross Income 135 201 -33.1% ------ ------ ------ Gross Margins 29.5% 27.8% 1.7 pp ------ ------ ------ SG&A 103 141 -26.7% ------ ------ ------ SG&A % of sales 22.5% 19.4% 3.1 pp ------ ------ ------ EBIT 32 61 -47.9% ------ ------ ------ EBIT Margins 6.9% 8.4% -1.5 pp ------ ------ ------ EBITDA 67 105 -36.7% Glass Containers 65 80 -18.6% Flat Glass 3 22 -85.5% EBITDA Margins 14.5% 14.5% 0 pp Net loss (70) (153) -54.6% ------ ------ ------ Net Income Margins -15.2% -21.2% +6 pp ------ ------ ------ Total Debt 1,458 1,456 0.1% Short Term Debt(1) 1,346 158 753.7% Long Term Debt 111 1,299 -91.4% Cash & Cash Equivalents(2) 112 128 -12.8% Total Net Debt 1,346 1,329 1.3% ------ ------ ------ * Million US$ Nominal (1) Since we are not in full compliance under our bond indentures, the outstanding amount of the Senior Notes debt was reclassified from long- term to short-term (2) Cash & Cash Equivalents include restricted cash which corresponded to cash collateralizing debt and derivatives instruments accounted for in other current assets.
Commenting on the results for the quarter, Mr. Hugo Lara, Chief Executive Officer, said, "As expected, sales declines of 40 percent in Glass Containers and 32 percent in Flat Glass continue to reflect a challenging economic environment exacerbated by the depreciation of the Mexican peso. Although there still is uncertainty on when the markets in which we participate will recover, we continue to execute our cost cutting and productivity programs with the objective of maintaining production levels equal to demand. The positive results from our efforts this quarter are further enhanced by ongoing strict cash management controls to support the long term viability of operations."
Mr. Claudio Del Valle, Chief Restructuring Officer, noted, "Although our Glass Containers business continues to suffer from the global slowdown in demand, operating performance benefited from the initiatives implemented to enhance profitability. Weak demand impacted volumes in every one of our markets with the exception of domestic soft drinks and CFT export volumes. Domestic and export sales measured in US dollars were down year-over-year by 40 percent and 11 percent, respectively. EBITDA decreased by 19 percent driven by lower energy costs, a reduction in the workforce to adjust to lower demand and cost reduction initiatives which partially offset the lower sales volumes, higher raw material prices and the effect of the deconsolidation of Comegua."
"Flat Glass sales continued to reflect the difficult environment in two of the most affected sectors of the NAFTA economy - automotive and construction, and the poor conditions in the construction market in Spain in which Vitro has important exposure. The depreciation of the Mexican peso also had a negative impact on sales. However, we are pleased to report that we continue to maintain the 46% share of the Mexican float glass market achieved in 1Q''09. This compares to a 45% market share in 3Q''08 and was achieved through our continued focus on new products targeted to glass transformers and new industrial and automotive clients. Auto glass volumes in the OEM market declined 23 percent driven by lower industry demand, while AGR domestic sales volumes rose 5 percent reflecting higher demand from insurance companies. Float glass export volumes increased 33 percent year-on-year driven by a recovery in demand from South American markets. EBITDA fell 86 percent this quarter reflecting the continued slowdown in the construction and automotive markets, lower prices stemming from increased competition and the negative impact from the depreciation of the peso against the US dollar. All this, however, was partially offset by the ongoing implementation of our cost reduction program and the positive impact from the lower natural gas prices."
"Looking forward, we maintain our EBITDA guidance for 2009 of between US$210-220 million. However, we have revised our CapEx guidance for the year to US$40 million, from our original guidance of US$74 MM. Given the low production volumes this year and the heavy CapEx investments made in 2007 and 2008 we have postponed certain maintenance investments until 2010."
Commenting on the restructuring process, Mr. Del Valle said, "We continue working to achieve an organized debt restructuring. We are in conversations with our bondholders with the objective of reconciling the differences between the counterproposal received on September 22 from Chanin Capital, the financial adviser of the bondholder group, and the one submitted by Vitro on August 5, 2009. In terms of the derivative counterparties, the judge announced yesterday that he would postpone his decision on the summary judgment plead by the banks and established December 17th, 2009 as the new hearing date."
"We are pleased with the progress on our cost control program," Mr. Lara noted, "and have exceeded our cost reduction goal for the year. To-date, our cost and production realignment initiatives have allowed us to achieve annualized savings of US$122 million, compared with our target of annualized savings of between US$80 and US$120 million."
"We remain focused on maximizing liquidity by preserving strict control over our cash position while optimizing working capital management. A US$34 million reduction in the planned CapEx for the year, together with the US$30 million reduction in working capital during the quarter achieved through our efforts to preserve cash have allowed us to increase our cash position in anticipation of the next two quarters. Given the seasonality of our business, these quarters are usually the lowest cash generators, requiring the highest working capital. In fact, we closed the quarter with a US$112 million cash position," continued Mr. Lara.
"As the global economic slowdown continues to affect Vitro''s performance, we remain committed to strengthening our operations and cash management as we adjust conditions to the environment, continue to serve our valued clients and prepare for the economic recovery," Mr. Lara noted. In addition, he continued, "Vitro believes it has successfully isolated its day to day operations from the current debt restructuring process allowing the Company to maintain its value as the parties continue conversations to achieve a timely and mutually satisfactory solution. Debt restructuring generally follows a schedule that is dependent on a series of factors, some of which are beyond Vitro''s control. One of those is the time required to achieve agreement among all parties involved."
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Vitro S.A.B. de C.V.
CONTACT: Investor Relations, Adrian Meouchi, +(52)81-8863-1765,
ameouchi@vitro.com, or Carlos Garza, +(52)81-8863-1730, cgarza@vitro.com, both
of Vitro S.A.B. de C.V.; or U.S. agency, Susan Borinelli,
sborinelli@breakstone-group.com, Barbara Cano, bcano@breakstone-group.com,
both of Breakstone Group, +1-646-452-2334l; or Media Relations, Albert Chico,
+(52)81-8863-1661, achico@vitro.com, or Roberto Riva, +(52)81-8863-1689,
rriva@vitro.com, both of Vitro, S.A.B. de C.V.
Web Site: http://www.vitro.com/
