As of the second week of September, Fortalezas Materiales began its listing in the Mexican Stock Exchange as a result of the split-up of Elementia. Elementia originally had three business units: Elementia Cemento, Elementia Metales, and Elementia Construsistemas. After the split, the firm divided itself only into 2 business units; Elementia Materiales, whose main activities will be lightweight construction and the development of innovative solutions in the construction sector, and Fortaleza Materiales, which will be more focused on the commercialization and production of cement.
This report takes into account the process of division and instead of doing a consolidated comparison, it only considers the business units that concern Fortaleza Materiales. In light of the above, Fortaleza Materiales reported decent results in the third quarter of the year and began its history as a cement firm.
In this quarter, the firm reported an increase of 9%, amounting to 9,448 billion Mexican Pesos. The advance is explained mostly by higher volumes and by prices in local currency. Although net sales improved, volume sales experienced a reduction of 3% primarily due to Mexico’s market contraction.
The region where the firm presented its higher revenues was Central America. Whereas México and the United States presented a decrease in a YOY comparison, Central America went from 35 million to 78, translating into an improvement of 125%. Unlike Mexico, the U.S stood at the same level as its previous quarter.
Regarding its operational profit, the firm reported an increase of 99% compared to the same period last year, reaching a total of $1.3 billion. This advance is the result of the reversal of Keystone's impairment, which positively affected the cost of sales.
The firm increased its revenues per interest, going from $4 million to 15 in the third quarter of 2021. As a result, the total financing cost also experienced an improvement, passing from $201 million to $62 million, a reduction of 69% in a year-over-year comparison. In the 9M accumulated, the financing costs totaled 355 million, a decrease of 45% compared to the same period last year.
Regarding its EBITDA, the firm reported a slight decrease in its figures. EBITDA closed at $990 million, experiencing a reduction of 3% mainly due to lower volumes and hence lower sales in Costa Rica and Mexico. While quarterly EBITDA did not record an optimal result, accumulated EBITDA 9M did report good results, thriving by 10% compared to the same period last year. As of September 30, the EBITDA margin closed at 28%, representing an increase of 30 basis points.
The two regions that most contributed to consolidated EBITDA were the US, improving its EBITDA by 38% in a quarter-over-quarter comparison, and Central America, experiencing a growth in its EBITDA of 3%.
Net income presented stunning results, reaching $911 million in this quarter and 1.1 billion in the accumulated 9M. These figures translated into an increase of 187% and 219%, respectively, compared to the same periods last year.
The business unit that presented the best results was the one located in the U.S. It ended this quarter with an operating income of 864 million, thriving by 433%. Likewise, in the accumulated, this concept presented an improvement.
As of September 30, the firm’s total assets experienced an important decrease, passing from 50.1 billion at the end of 2020 to 28.8. In the same way, total liabilities were reduced by 11.5 billion, passing from 29.1 bn on December 30 to 17.5 bn at the end of the third quarter. Both concepts are likely results of the split-up of Elementia.
Finally, cash and equivalents decreased by 58% compared to the fourth quarter of 2020, mainly due to the use of the cash surplus for debt prepayments that were made in the last months of January and April. Likewise, there is a higher consumption of working capital, mainly due to the increase in petcoke, which is one of the main raw materials for cement production.
