OUTSTANDING QUALITY OF BANCO AZTECA MEXICO S LOAN PORTFOLIO, DELINQUENCY RATE DECREASES THREE PERCENTAGE POINTS TO 8.4%

Transcription

1 OUTSTANDING QUALITY OF BANCO AZTECA MEXICO S LOAN PORTFOLIO, DELINQUENCY RATE DECREASES THREE PERCENTAGE POINTS TO 8.4% Consolidated Gross Credit Portfolio Grows 4% to Ps.26,820 Million and Deposits Increase 6% to Ps.47,629 Million Consolidated 1Q Revenue of Grupo Elektra of Ps.10,700 Million, and EBITDA of Ps.1,405 Million Mexico City, April 28, 2009 Grupo Elektra, S.A. de C.V. (BMV: ELEKTRA*; Latibex: XEKT), Latin America s leading financial services company and specialty retailer, reported today its financial results for the first quarter of Once again we achieved a positive consolidated quarterly revenue performance thanks to the continued dynamism of our financial business. Deposits and loans continued with a firm growth in Mexico, Central and South America; a reflection of the trust of millions of customers in our solid deposit products, and their preference on credit options, which effectively enhance purchasing power, said Carlos Septién, Chief Executive Officer of Grupo Elektra and Banco Azteca. The growth was in line with the outstanding strength of our assets, as the delinquency rate of Banco Azteca Mexico decreased three percentage points compared with the prior year, despite the adverse economic situation, due to solid risk management and thorough knowledge of our market, added Mr. Septién. Consolidated First Quarter Results Consolidated revenue was Ps.10,700 million, 5% more than the Ps.10,185 million of the prior year. Costs and operating expenses were Ps.9,294 million, from Ps.8,528 million in the same quarter of the prior year. Grupo Elektra reported EBITDA of Ps.1,405 million, compared to Ps.1,656 million for 1Q08. The EBITDA margin was 13% this period. The company registered a net loss of Ps.2,899 million, compared to net income of Ps.111 million a year ago. 1

2 1Q Q 2009 Change Ps. % Consolidated Revenue Ps.10,185 Ps.10,700 Ps.515 5% EBITDA Ps.1,656 Ps.1,405 Ps.(251) -15% Net Results Ps.111 Ps.(2,899) Ps.(3,009) --- Results per Share Ps.0.47 Ps.(11.92) Ps.(12.39) --- Figures in millions of pesos. As of March 31, 2009, Elektra* outstanding shares were million. Consolidated Revenue The 5% increase in consolidated revenue resulted from a 13% rise in financial revenue and a 3% decrease in commercial revenue. Costs and Expenses Consolidated costs were Ps.5,740 million, compared to Ps.5,079 million reported in the same period a year ago. The main items within the financial cost are the creation of loan loss reserves and the interest paid to depositors on savings. The commercial cost mainly includes the cost of goods sold. Consolidated operating expenses were Ps.3,554 million, compared to Ps.3,449 million in the same period a year ago. The increase mainly resulted from higher operating expenses related to the expansion of Grupo Elektra and Banco Azteca in Latin America, and the selling of FAW automobiles in Mexico. The expansion has related costs and expenses; however the outlook into future yields is very positive in the regions where we operate. During the quarter, the company continued important steps to continue enhancing operating efficiency in response to difficult economic conditions. EBITDA and Net Result Consolidated EBITDA was Ps.1,405 million, compared to Ps.1,656 million reported a year ago; the EBITDA margin for the quarter was 13%. In relation to the fourth quarter 2008, EBITDA increased 75%. 2

3 Grupo Elektra registered a net loss of Ps.2,899 million, compared with net income of Ps.111 million for the prior year, mainly due to an increase of Ps.3,810 million in other financial expenses in this quarter. This resulted from a 19% decrease in the market value of underlying assets in financial instruments that the company held in the period, and did not imply cash flow. The decrease in this quarter follows an appreciation of 52% in the market price of the underlying assets in the fourth quarter 2008, as was previously detailed. Cash and Cash Equivalents As of March 31, 2009, total cash and cash equivalents were Ps.50,176 million, 22% higher than the Ps.41,230 million of the prior year, mainly due to a higher investment levels of the commercial business. At the end of the quarter, the cash and investments balance of the financial business was Ps.29,170 million, and the commercial business was Ps.21,006 million. Consolidated Gross Loan Portfolio As of March 31, 2009, the total consolidated gross loan portfolio for Banco Azteca Mexico, and Banco Azteca and Elektrafin Latin America grew 4% to Ps.26,820 million, compared to Ps.25,747 million a year prior. Financial Business Banco Azteca Mexico During the first quarter, revenue from Banco Azteca Mexico was Ps.5,008 million, 12% higher than the Ps.4,457 million reported a year ago, as a result of a rise in the main credit lines of the bank. The financial cost for the bank during the quarter was Ps.1,670 million, compared with Ps.1,317 million reported the previous year. As of March 31, 2009, the preliminary capitalization index of Banco Azteca was 12.7%. The company considers the index to be at a level that optimizes its equity s profitability. The gross credit portfolio was Ps.22,790 million, compared to Ps.22,635 million reported on March 31, At the end of the quarter, the bank had a total of 8.3 million active accounts, from 8.1 million at the end of the same period a year ago. The average term of the credit portfolio in the principal credit lines consumer, personal loans and Tarjeta Azteca was 61 weeks at the end of 1Q09, unchanged from the prior year. The company has a thorough knowledge of its customers payment capacity and has been proactive with measures to control credit risks to positively influence asset quality. At 3

4 the end of the quarter, Banco Azteca Mexico s delinquency rate was 8.4%, compared to 11.2% a year ago. Allowance for loan losses to past-due loan ratio is 1.1 times. Deposits of Banco Azteca Mexico were Ps.46,781 million at the end of 1Q09, 6% more than the Ps.43,968 million of the previous year. At the end of the quarter, Banco Azteca had a total of 7.2 million active savings and deposit accounts, a 14% increase from 6.3 million accounts at the end of the same period a year ago. Seguros Azteca In the quarter, Seguros Azteca revenue was Ps.244 million, total assets were Ps.1,367 million and stockholders equity was Ps.679 million, 4% higher than the Ps.650 million reported a year ago. Afore Azteca As of March 31, 2009, Siefore Azteca s assets under management were Ps.10,185 million. Total assets were Ps.234 million and stockholders equity was Ps.204 million. Commercial Business Revenue from the commercial business in the quarter was Ps.4,756 million, compared to Ps.4,903 million reported a year ago. As of March 31, 2009, the total debt with cost of the commercial business was Ps.7,079 million, compared to Ps.5,764 million reported a year ago. Net debt of the commercial business had a negative balance of Ps.13,927 million, compared to a negative balance of Ps.7,707 million as of March 31, %. Compared to the fourth quarter 2008, net debt of the commercial business decreased Out of the total debt of the commercial business, 91% is denominated in pesos, in line with the majority earnings of the company, with a weighted average interest rate of 10.1%. The remaining 9% of the debt denominated in foreign currency is covered with operations on the asset side in the same currency. Expansion In line with the company s expansion strategy which provides a superior market position in Mexico and in Latin America Grupo Elektra grew 6%, to 2,009 points of sale as of March 31, The strongest growth came from Central and South America, where points of sale increased 11%, to 440 points of sale; while the number of units in Mexico grew 5%, to 1,569. 4

5 Company Profile: Grupo Elektra ( is Latin America's leading financial services company focused on the mass market. The Group operates more than 2,000 points of sale in Mexico, Brazil, Guatemala, Honduras, Peru, Panama, El Salvador and Argentina. Grupo Elektra also sells and markets its consumer finance, banking and financial products and services through Banco Azteca branches located in Mexico, Brazil, Panama, Guatemala, Honduras and Peru. Grupo Elektra is a Grupo Salinas company ( 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 ( Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. The companies include TV Azteca ( Azteca America ( Grupo Elektra ( Banco Azteca ( Afore Azteca ( Seguros Azteca ( and Grupo Iusacell ( Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. However, 6 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. Dinorah Macias Grupo Elektra S.A. de C.V. Tel. +52 (55) dmacias@elektra.com.mx Tristán Canales Grupo Salinas Tel. +52 (55) tcanales@gruposalinas.com.mx Investor Relations Press Relations Bruno Rangel Grupo Salinas Tel. +52 (55) jrangelk@gruposalinas.com.mx Daniel Mc.Cosh Grupo Salinas Tel. +52 (55) dmccosh@gruposalinas.com.mx 5

6 GRUPO ELEKTRA, S.A. DE C.V. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS MILLIONS OF MEXICAN PESOS 1Q08 1Q09 Change Financial Revenue 5,282 52% 5,943 56% % Commercial Revenue 4,903 48% 4,756 44% (147) -3% Total Revenue 10, % 10, % 515 5% Financial Cost 1,708 17% 2,430 23% % Commercial Cost 3,371 33% 3,311 31% (61) -2% Total Cost 5,079 50% 5,740 54% % Gross Profit 5,105 50% 4,959 46% (146) -3% Selling, General & Administrative Expenses 3,449 34% 3,554 33% 105 3% Depreciation and Amortization 414 4% 493 5% 79 19% Total Operating Expenses 3,863 38% 4,047 38% 184 5% Operating Income 1,243 12% 913 9% (330) -27% EBITDA 1,656 16% 1,405 13% (251) -15% Financing Result: Interest income 16 0% (78) -1% (93) -594% Interest expense (257) -3% (284) -3% (28) 11% (Loss) gain in Foreign exchange (212) -2% 22 0% % Other financial expenses (550) -5% (4,359) -41% (3,810) 693% (1,003) -10% (4,700) -44% (3,697) 369% Other income (expenses) 25 0% (26) 0% (51) -205% Income (loss) before taxes 264 3% (3,814) -36% (4,078) n.m. Provision for taxes (101) -1% 1,061 10% 1,162 n.m. Equity in income of CASA (TV Azteca) (52) -1% (146) -1% (93) 178% Net Income (loss) 111 1% (2,899) -27% (3,009) n.m. 6

7 GRUPO ELEKTRA, S.A. DE C.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET MILLIONS OF MEXICAN PESOS Commercial Business Financial Business Grupo Elektra Commercial Business Financial Business Grupo Elektra At March 31, 2008 At March 31, 2009 Change Cash 1,077 5,404 6, ,064 13,021 6, % Marketable Securities and investments 12,394 22,355 34,749 20,049 17,105 37,155 2,405 7% Commercial Loans 2,755 2,755 4,434 4,434 1,678 61% Consumer Loans 1,399 17,532 18,931 1,321 17,360 18,681 (249) -1% Mortgage Loans % Performing Loan Portfolio 1,399 20,959 22,358 1,321 22,537 23,858 1,501 7% Past due Commercial Loans % Past due Consumer Loans 710 2,551 3, ,896 2,765 (496) -15% Past due Mortgage Loans % Total Past-due Loans 710 2,679 3, ,093 2,962 (428) -13% Gross Loan Portfolio 2,108 23,639 25,747 2,190 24,630 26,820 1,073 4% Allowance for bad Loans 402 2,872 3, ,310 3,182 (92) -3% Total Net Loan Portfolio 1,706 20,767 22,473 1,319 22,320 23,638 1,165 5% Other Current Assets 1,403 4,353 5,756 6,082 4,596 10,678 4,923 86% Inventory 3,468 3,468 3,553 3, % Current assets 20,048 52,879 72,927 31,960 56,085 88,045 15,118 21% Investment in Shares 2, ,039 1, ,603 (436) -21% Fixed Assets 4,569 1,629 6,199 5,274 1,505 6, % Other Assets 1, ,411 1, , % TOTAL ASSETS 28,048 54,528 82,576 40,327 57,613 97,940 15,365 19% Demand Deposits 45,114 45,114 47,629 47,629 2,516 6% Short-Term Bank Debt 2, ,091 4, ,891 1,800 58% Capitalized Lease Obligations (6) -13% Short-Term Liabilities with Financial Cost 2, ,138 4, ,932 1,794 57% Suppliers and Other Short-Term Liabilities 5,079 2,340 7,420 6,433 2,830 9,264 1,844 25% Short-Term Liabilities without Financial Cost 5,079 2,340 7,420 6,433 2,830 9,264 1,844 25% Total Short-Term Liabilities 7,670 48,001 55,671 11,293 50,531 61,825 6,154 11% Long-Term Bank Debt 3,151 1,095 4,246 2,207 1,189 3,396 (850) -20% Capitalized Lease Obligations (10) -46% Long-term Liabilities with Financial Cost 3,173 1,095 4,268 2,219 1,189 3,408 (860) -20% Long-term Liabilities Without Financial Cost 3,263 (194) 3,069 3,031 (209) 2,822 (247) -8% Total Long-Term Liabilities 6, ,337 5, ,230 (1,107) -15% TOTAL LIABILITIES 14,107 48,901 63,008 16,543 51,512 68,055 5,047 8% Stockholders' Equity 13,941 5,627 19,567 23,784 6,101 29,885 10,318 53% LIABILITIES + EQUITY 28,048 54,528 82,576 40,327 57,613 97,940 15,365 19% 7

8 GRUPO ELEKTRA, S.A. DE C.V. AND SUBSIDIARIES INFRASTRUCTURE 1Q08 1Q09 Change Points of sale in Mexico Elektra (1) % % 51 7% Salinas y Rocha (1) 55 3% 55 3% - 0% Freestanding Branches (2) % % 23 3% Total 1,495 79% 1,569 78% 74 5% Points of sale in Latin America Elektra (3) 138 7% 173 9% 35 25% Freestanding Branches % % 9 3% Total % % 44 11% TOTAL 1, % 2, % 118 6% (1) Each store has a Banco Azteca branch. (2) In 1Q09, includes 39 Bodegas de Remate that continues operating only financial services. (3) In 1Q09, only 149 Latin America Elektra's store have a Banco Azteca branch. Floor Space (m²) Elektra Mexico 627,741 72% 670,924 72% 43,183 7% Elektra Latin America 120,577 14% 137,609 15% 17,032 14% Salinas y Rocha 45,645 5% 45,645 5% - 0% Freestanding Branches 83,770 10% 83,500 9% (270) 0% TOTAL 877, % 937, % 59,944 7% Employees Mexico 33,301 84% 29,113 81% (4,188) -13% Latin America 6,320 16% 6,759 19% 439 7% Total Employees 39, % 35, % (3,749) -9% 8