#Mexico #Mexico City #EBITDA Growth #Grupo Elektra #Banco Azteca

Grupo Elektra's Stellar Financial Performance in Q4 2024

Grupo Elektra, S.A.B. de C.V., recognized as Latin America's premier specialty retailer and financial services provider, has made headlines with its recent financial disclosures. The company reported a striking 57% growth in EBITDA, bringing it to Ps. 7,441 million in the fourth quarter of 2024. This impressive performance is primarily attributed to a substantial increase in both consolidated revenue and operational efficiency.

Revenue Surge

In the fourth quarter, Grupo Elektra's consolidated revenue reached Ps. 57,790 million, marking a 10% increase from Ps. 52,654 million in the same quarter of the prior year. This revenue growth was largely driven by a 13% rise in financial income and a 6% increase in commercial sales. The latter reflects a significant uptick in the sales of motorcycles and white goods, which contributed to improved mobility and quality of life for many consumers across Latin America.

Cost Management

Consolidated operating costs and expenses rose by just 5%, totaling Ps. 50,348 million, allowing the company to maintain a robust profit margin. Interestingly, Grupo Elektra managed to decrease its consolidated costs by 5% in the fourth quarter, leading to heightened gross profit levels. The company's gross margin also improved, climbing to 51% in this period.

Operational Excellence

With an eye on efficiency, Grupo Elektra achieved an operating income of Ps. 4,954 million, which represents a phenomenal 380% increase compared to the Ps. 1,032 million reported in Q4 2023. However, despite these positive operational metrics, the company reported a net loss of Ps. 11,656 million, a sharp contrast to the net income of Ps. 773 million seen in the previous year. This loss is attributed to fluctuations in the market value of financial instruments and increased tax provisions.

Asset Quality and Financial Position

On a more positive note, Banco Azteca, a significant arm of Grupo Elektra, continues to show resilience with its gross loan portfolio growing by 11% to Ps. 187,645 million. The asset quality of Banco Azteca is also improving, as evidenced by a reduction in the non-performing loan (NPL) ratio, which decreased from 4.2% to 3.8% over the year.

Despite the operational challenges, including a revised approach to its asset management, Grupo Elektra has positioned itself favorably for future growth. The company’s liquidity coverage ratio stands at an impressive 1,056%, showcasing its robust financial health amid market volatility.

Strategic Expansion Plans

As of the end of 2024, Grupo Elektra operated over 6,150 points of contact across Mexico, the USA, and Central America. This network facilitates the company’s mission to enhance customer service and operational efficiency while capitalizing on new growth opportunities in these vibrant markets. Their extensive retail footprint plays a crucial role in ensuring customer proximity and service quality.

In conclusion, even with the reported net losses, the healthy increase in EBITDA and revenue reflects Grupo Elektra's strong operational foundations and aggressive strategies for market penetration. Moving forward, stakeholders and analysts will be keen to observe how the company navigates the complexities of the financial landscape while maintaining this growth momentum.