#Financial Performance #Mexico #Mexico City #EBITDA Growth #Grupo Elektra

Grupo Elektra Shows Remarkable Financial Growth in Q1 2025

Grupo Elektra, one of Latin America's foremost specialty retailers and financial services providers, recently announced its financial results for the first quarter of 2025, showcasing a significant upward trend in profitability and revenue generation.

In the latest report published on April 29, 2025, the company reported a 16% increase in consolidated revenue reaching Ps. 51,768 million, compared to Ps. 44,562 million in the same quarter of the previous year. This surge was primarily driven by a healthy increase in financial revenue and a steady rise in commercial sales, indicating a robust demand in the marketplace.

Key Financial Highlights

• - EBITDA Growth: The company's EBITDA rose by 9% to Ps. 6,939 million, up from Ps. 6,363 million a year ago. This growth reflects the company’s ongoing operational efficiency and effective cost management strategies.
• - Operating Income: Grupo Elektra's operating income also saw a boost, climbing to Ps. 4,553 million, a 12% increase from Ps. 4,067 million in Q1 2024.
• - Net Income: The financial service giant reported a net income of Ps. 1,865 million, compared to Ps. 1,721 million in the prior year, showcasing a commendable 8% growth.

Revenue Breakdown

The consolidated revenue hike is attributed to a 23% increase in financial income, amounting to Ps. 33,844 million, a rise from Ps. 27,526 million year-over-year. Banco Azteca, a pivotal subsidiary, experienced a remarkable 21% growth in its revenue, bolstered by a growing gross loan portfolio that supports hundreds of thousands of families and businesses in the region.

Additionally, commercial sales contributed significantly to revenue with an increase to Ps. 17,924 million, up from Ps. 17,036 million the previous year, primarily driven by strong sales of motorcycles and home appliances, underscoring the company’s role in improving the quality of life and productivity for many customers.

Cost Efficiency

Grupo Elektra maintained a keen focus on cost management, recording a 9% increase in consolidated costs, totaling Ps. 23,550 million. This growth was largely attributed to a 19% rise in financial costs resulting from the expansion of loan reserves. Despite this increase, the overall gross profit increased by 23%, achieving Ps. 28,219 million, and improving the gross margin to 55%.

The company also experienced a notable rise in selling, administrative, and promotional expenses, which grew by 28% to Ps. 21,280 million, reflecting increased investments in marketing and operational strategies.

Operational Insights

At the close of the quarter, the consolidated gross loan portfolio stood at Ps. 198,915 million, marking a 14% increase year-on-year. This positive trend indicates strong demand and effectiveness in loan origination, critical for Grupo Elektra's core financial services operations. The company reported a non-performing loan ratio of 4.4%, slightly up from 4.2%, suggesting a proactive approach in managing credit risks in a growing portfolio.

The innovative financial solutions and a growing distribution network, with over 6,150 contact points in multiple countries, enable Grupo Elektra to remain closely connected with its customer base and adapt to market needs swiftly.

Conclusion

Through strategic growth initiatives and a resolute focus on customer engagement, Grupo Elektra continues to pave its way as a leader in the financial services sector in Latin America. The first quarter of 2025 has set a positive tone for the company, with strong fundamentals and a promising outlook for continued expansion in the upcoming quarters. Investors and stakeholders alike will be keen to see how these results impact future developments within the company as it navigates the evolving landscape of retail and financial services.