#Mexico #Mexico City #financial results #water solutions #Rotoplas

Rotoplas Reports Fourth Quarter 2024 Results

Grupo Rotoplas S.A.B. de C.V., recognized as a leading water solutions company in the Americas, recently announced its financial results for the fourth quarter of 2024. Despite encountering headwinds, particularly in Argentina due to adverse macroeconomic conditions, the company has shown resilience and adaptability through innovative strategies and operational improvements.

Key Financial Highlights

In the fourth quarter, Rotoplas' net sales totaled Ps. 2,723 million, representing a significant decline of 19.3% compared to the same period in 2023. This downturn can largely be attributed to the challenging economic situation in Argentina, where net sales fell sharply, overshadowing growth in other markets. Notably, if Argentina's figures are excluded, global net sales actually rose by 7.5%.

Furthermore, product sales declined by 22.7%. This drop was most prominently felt in Argentina, where lower consumer spending has resulted in diminished sales volumes. On the flip side, service sales saw a robust increase of 45.6%, primarily driven by the surging popularity of the bebbia SMART platform, which now boasts over 133,000 subscribers.

From a profitability perspective, the gross profit fell to Ps. 1,112 million—a decrease of 27.5% year-on-year. This resulted in a gross margin contraction of 460 basis points, settling at 40.8%. Operating income suffered a stark 83.4% drop, reaching only Ps. 64 million due to the lower sales base and expenses related to ongoing digital initiatives aimed at enhancing user experience with water solutions.

The quarter recorded an EBITDA of Ps. 239 million, declining 56.8% from the previous year, leading to an EBITDA margin of 8.8%. This reduction was compounded further by extraordinary expenses tied to severance payments during an organizational restructuring effort. Consequently, Rotoplas reported a net loss of Ps. 122 million compared to a net profit of Ps. 71 million in Q4 2023.

Cumulative 2024 Results

For the full year, net sales reached Ps. 11,201 million, indicating a decrease of 7.8% relative to 2023. Similar to quarterly results, the sales decline was primarily influenced by Argentina's economic crisis, although excluding this market would show flat growth year-over-year. Cumulative product sales also dropped by 10.6%, while service sales soared by 43.6%—highlighting a significant shift towards digital service offerings.

The gross profit for the year is recorded at Ps. 5,033 million, reflecting a reduction of 9.4% from last year. Operating income was down 44.7% at Ps. 881 million, while EBITDA totaled Ps. 1,492 million, marking a 30.0% decrease year-on-year. Nevertheless, net income saw a profit of Ps. 169 million, a stark contrast to the 2023 high of Ps. 312 million, confirming the challenging financial landscape.

Strategic Initiatives and Future Outlook

Despite these results, the message from CEO Carlos Rojas Aboumrad emphasizes a commitment to strategic adaptations. He outlined efforts to enhance operational agility and consolidate market presence. Key objectives include a focus on innovation, driven by advancements in digital platforms and further investment in service expansion aimed at sustainability.

Rotoplas has notably migrated its operations to Google Cloud, facilitating improved data management and analytics capabilities. The successful completion of the SMART project in Mexico is expected to optimize production efficiency. Expanding e-commerce capabilities for both B2B and B2C segments demonstrates the company’s drive towards digital transformation.

Looking ahead, Rotoplas is addressing cash flow enhancement and optimizing its financial structure through selective investments. The company remains committed to the strategic pillars of sustainable growth, digitalization, and stakeholder value creation.

Conclusion

The financial results for Q4 2024 present a mixed picture for Rotoplas, reflecting the ongoing challenges in key markets, particularly Argentina, while showcasing emerging strengths in service segments and a commitment to strategic innovation. As 2025 approaches, the company's proactive approach and emphasis on resilience may well position it for recovery and sustainable growth in the face of economic uncertainty.