MARKETS
The S&P / BMV IPC fell 2.6% over the week dragged down by profit taking after the early year rally, mixed quarterly reports, concerns from continued tariff threats from US President Donald Trump, in addition to weak macroeconomic data in Mexico. Meanwhile, the Peso lost 0.6% to close at MXN$20.55/USD while the yield of the Mexican 10-year M-Bono fell 29 bps to 9.51%.
The S&P / BMV IPC’s top stock gainers for the week were: Q* (+5.7%), FEMSA UBD (+5.7%) and ALFA A (+2.5%). The index’s biggest losers were: CUERVO * (-10.1%), ALSEA * (-9.9%) and ORBIA * (-9.7%).
The following macroeconomic indicators will be announced next week: inflation rate, private consumption, gross fixed investment, business confidence, and light vehicle sales.
LISTED COMPANIES
Planigrupo announced it has withdrawn its bid for Acosta Verde’s shares, with immediate effect. The company cited its inability to come to terms with AV’s management, as well as the lack of a favorable opinion from antitrust watchdog COFECE.
Femsa reported favorable 4Q24 results, beating market expectations. Consolidated revenues experienced a 12.8% increase, propelled by growth across all business units and favorable FX effects. Proximity Americas revenues rose 13.2%, supported by store openings (1,596 during the year to close at 24,462 units), higher SSS and the incorporation of the US operations since October 1st, 2024. Proximity Europe revenues saw a 21.5% rise, while Health division revenues grew 13.3%. Fuel revenues were up 8.0%. Coca-Cola FEMSA revenues grew 14.3%. Femsa gross profit increased 16.7%, driven by expansions in Proximity Americas, Health, and Coca-Cola FEMSA. Gross margin improved 140 basis points. Adjusted EBITDA was up 25.9%, while the EBITDA margin expanded 170 basis points. Net income showed a 78.3% increase, boosted by higher non-cash FX gains and discontinued operations. The company said it started a new CEO search, with Jose Antonio Fenandez Garza, CEO of Femsa retail, and importantly the current Chairman and CEO’s son and through his mother a member of the controlling shareholder family, the overwhelming favorite. The company will also look for a banking license in Mexico, taking advantage of Spin by Oxxo’s 13.1 million customers.
Grupo Bimbo released soft 4Q24 results, hit by margin contraction. Net sales quarterly achieved a MXN$110.3 billion record level, which represents an 8.3% YoY increase. This reflected a favorable FX effect, positive price/mix and volumes, along with inorganic contributions from acquisitions. North America net sales improved 7.1% (but went down 5.7% excluding FX), impacted by soft consumption, offset by market share gains in the snacking category. Mexico net sales rose 1.7%, attributable to positive volume contribution across most categories. EAA sales saw substantial 24.6% growth (9.6% excluding FX), as a result of Bimbo QSR’s strong performance, double-digit growth in several countries and acquisitions. Latin America sales advanced 20.7% (13.8% excluding FX), due to robust sales performance across its divisions. Gross profit was up 9.9% YoY, pushing the gross margin up 70 bps to 52.5%, mainly from lower raw material costs. However, adjusted EBITDA grew just 2.3%, with the EBITDA margin decreasing 70 bps, due to investments across the supply chain in North America.
Fibra Uno posted positive 4Q24 results. Total revenues were up 11.0% YoY as a result of higher occupancy levels, inflation adjustments in existing contracts, contract renewals, a weaker FX rate benefiting dollar-denominated rents, and reversed reserves tied to tenant support after Hurricane Otis. Occupancy across the portfolio reached 95.6%, a 0.6% expansion from the previous year. NOI grew 9.1%, while the NOI margin on rental revenue stood at 81.5%, with a 2.1 PP contraction. FFO was up 8.8%, and the FFO margin was 36.7%, down 1PP. Funo expects to distribute MXN$2.1 billion (MXN$0.5513/CBFI), corresponding to 4Q24 results.
Orbia reported soft 4Q24 results, hit by non-recurring charges. Net revenues increased 0.5% YoY, driven by higher sales in Precision Agriculture and Polymer Solutions, largely offset by lower revenues in Connectivity Solutions, Building & Infrastructure and Fluor & Energy Materials. EBITDA decreased 2.0%, primarily driven by Fluor & Energy Materials, Connectivity Solutions and Building & Infrastructure. Reported EBITDA included one-time legal and restructuring costs of approximately US$51 million. Excluding these items, adjusted EBITDA grew 20.8%. Net loss amounted to US$62 million in the quarter, from last year’s US$71 million. In 2024, the company met its EBITDA guidance. For 2025, the company expects an EBITDA of approximately US$1.25 billion and Capex of around US$400 million.
Kof reported positive 4Q24 results. Total revenues increased 14.3% fueled by a 2.2% volume growth, revenue management initiatives, and favorable mix effects. Gross profit advanced 17.1% driven mainly by top-line growth, favorable mix effects coupled with easing sweetener and PET costs, and favorable hedging initiatives. Adjusted EBITDA grew 22.5% YoY. Net profits were 35.1% higher driven mainly by operating profit growth and FX gains.
Liverpool reported neutral 4Q24 results; lower margins offset sales growth. Total revenues were 9.0% higher YoY, fueled by solid performance across all business lines, slightly above the preliminary figure released on January 13th. Retail sales grew 8.2%, driven by a successful commercial strategy with compelling brands, private label offerings, value-added services, customer loyalty programs, and effective seasonal promotions. Liverpool’s SSS sales rose 7.3%, and Suburbia’s increased 5.2%. Financial business revenues advanced 17.4% driven by a 12.9% net loan portfolio growth, with a 3.2% NPL ratio. Real estate revenues were up 15.1%. EBITDA grew 5.3%, and the EBITDA margin contracted 70 bps to 19.7%.
Gentera reported positive 4Q24 results, beating market expectations with high loan growth and commissions, and expanding margins and ROE. Total loan portfolio peaked at MXN$82.7 billion, a substantial 27.0% YoY increase, servicing 5.7 million people. The NPL ratio stood at 3.93% in 4Q24, compared to last year’s 3.44% level. NIM improved to 40.4% from 39.6%, driven by strong loan portfolio performance at Banco Compartamos and ConCrédito, and slower growth in interest expenses, benefitting from the ongoing easing cycle. Provisions for loan losses rose 27.6%, due to portfolio growth at Banco Compartamos, higher credit risk in Compartamos Financiera Peru, and a smaller rise in ConCredito. NIM after provisions expanded to 28.6%, from 28.1%. Commissions and fee income grew 91.8%, fueled by insurance fees and penalty fees on late payments. Net income increased 55.3% with a 23.4% ROE in 4Q24, from 17.9% in 4Q23.
Asur reported positive 4Q24 results, with significant revenue, EBITDA and net profit growth. Total revenue surged 31.2% YoY, fueled by construction service revenues in Mexico alongside expanded aeronautical and non-aeronautical service revenues. Total passenger traffic fell 0.3% with Mexico experiencing an 8.0% drop, while San Juan’s rising 9.6%, and Colombia’s jumping 14.1%. EBITDA climbed 22.5%, yet the EBITDA margin contracted 400 bps to 56.7%. Adjusted EBITDA Margin, which excluded the effect of IFRIC 12 related to the construction of or improvements to concessioned assets in Mexico, Puerto Rico, and Colombia, was 69.7% in 4Q24, compared to 67.7% in 4Q23. Net income soared 37.2% YoY on strong operating results.
Gap reported positive 4Q24 results, above consensus. Total revenues rose 5.4% due to growth in aeronautical revenues, driven by passenger traffic recovery, resumption of airline operations and a positive FX impact, and non-aeronautical revenues, boosted by the consolidation of the cargo and free trade zone business at Guadalajara Airport and the depreciation of the peso. Total passenger traffic across GAP’s 14 airports increased 1.4%. EBITDA grew 14.9%. The EBITDA margin improved 500 bps to 49.4%. The EBITDA margin excluding IFRIC-12 experienced a slight contraction to 66.9%, from 67.8%, due to higher cost of services. Net income decreased 3.9% primarily due to a significant rise in income taxes.
Oma reported positive 4Q24 results. Total revenues increased 10.9%, which stemmed from an 11.1% rise in aeronautical revenues propelled by higher passenger charges and a substantial 21.7% growth in non-aeronautical thanks to increased commercial and diversification activities. Total passenger traffic increased 4.6% to 7.1 million, benefitting from growth in Acapulco, Monterrey, and Mazatlán airports. Adjusted EBITDA was up 7.9% YoY, while the adjusted EBITDA margin contracted to 73.8%, from last year’s 77.7%. Net income decreased 5.9% due to higher financial expenses.
Genomma Lab Internacional announced strong 4Q24 results. Net sales reached increased 32.4%, driven by growth in the US, Mexico, Brazil, Colombia, and Central America, coupled with a sales recovery in Argentina and favorable FX for international operations. EBITDA grew 55.0% with an EBITDA margin of 24.0%, which was 351 bps higher, resulting from manufacturing cost efficiencies and company-wide cost containment and productivity initiatives. Net profits reached MXN$473.5 million in the quarter, compared to a MXN$61.2 million net loss in 4Q23.
Lacomer reported a strong 4Q24, with total sales increasing 9.9% YoY driven by new stores and SSS up 5.5%. Gross profit rose 12.4% YoY, leading to a gross margin of 30.0%, a 66 bps improvement due to product mix changes and higher efficiency in distribution and inventory management. EBITDA grew 11.0% YoY, with a 10 bps margin expansion, while net profit experienced a slight 1.3% YoY rise.
Volaris reported weak sales but higher profitability in 4Q24. Total operating revenues decreased 7.1%, primarily due to the depreciation of the Mexican peso against the US dollar and a reduction in ASMs, partially offset by higher ancillary revenues. ASMs declined 5.0% while the load factor fell 0.8 PP to 87.3%. The EBITDAR grew 17.8% YoY primarily driven by strict cost control and more favorable jet fuel prices. The EBITDAR margin was 39.6%, up 8.4 percentage points. In 2025, the company expects a 12% ASM growth, EBITDAR margin between 34-36% and US$250 million Capex. The full year 2025 outlook includes the compensation that Volaris expects to receive for the projected grounded aircraft resulting from the GTF engine inspections, in accordance with the company’s agreement with Pratt & Whitney.
Alsea reported solid 4Q24 results but expects lower margins in 2025. Net sales increased 11.1%, driven by strong consumption, continued brand preference, and effective commercial strategies, primarily in Mexico and to a lesser extent in Spain. The company opened 275 new units in 2024. Digital sales (E-Commerce, Aggregators & Loyalty) accounted for 33.5% of Alsea’s total sales in 4Q24, with a solid 30.2% growth. The company had 8.2 million active users in loyalty programs. EBITDA grew 13.0%, with a 16.4% margin, reflecting a 30-bps expansion. The net debt / EBITDA ratio reached 2.3x at the end of 2024. The 2025 guidance includes a low-teens sales increase, SSS mid-single digit rise, 180-200 openings, mid-single digit EBITDA growth and total debt to EBITDA (pre-IFRS-16) of 2.6-2.8x.
Soriana reported weak 4Q24 results. Total revenue decreased 0.8% YoY, primarily due to extraordinary food supply sales and insurance recovery related to Hurricane Otis in Acapulco in 4Q23. SSS experienced a 0.5% fall. Gross profit increased 2.1%, with a 70 bps margin expansion to 23.8%, but operating expenses rose 11.6% driven by higher personnel costs from increased coverage of vacancies and the effect of 18 new stores. EBITDA fell 7.9% with a 60 bps margin erosion to 8.0%; excluding extraordinary items, EBITDA would have grown 16.7%. Net profits fell 15.0% due to lower operating results.
Invex Controladora posted a record MXN$745 million net profit in the quarter, up 63% YoY, and a significant improvement in ROE, which reached 22%, compared to 10% in 4Q23. This figure far exceeded our MXN$633 million projection. The main driver of the quarter was the Financial Services Division (operating revenues +49% YoY and pre-tax result +46%), which benefited from a 21% increase in the total portfolio, in turn driven by a 37% growth in the consumer portfolio. Asset quality remained solid with an NPL ratio of only 2.3%, below the sector average. This division registered record trading results and high fees largely due to the performance of the consumer portfolio, which offset the high level of provisions. The Energy Transition Division (+10% in revenues and +117% in pre-tax results) recorded a 28% growth in energy supply in Mexico and Texas, with a 3 PP improvement in gross margin due to lower electricity costs. ROE reached 54% in 4Q24, significantly better than the 20% in 4Q23.
Norte 19 posted neutral 4Q24. Revenues were up 2.5% YoY as the company continued adjusting rates above inflation, which resulted in a 10.1% ADR increase. Additionally, occupancy improved 30 bps to 56.9%, boosting RevPar by 10.6%. The number of total rooms in the portfolio remained virtually unchanged at 17,396. EBITDA decreased 21.2% YoY on a non-comparable basis as the company reversed a MXN$40 million provision in 4Q23 and recorded non-recurring expenses of MXN$50 million in 4Q24 related to the pension plan, severance pay, increased food and beverage staff and expansion of the full-service segment. Excluding such extraordinary items, we estimate that EBITDA would have increased 7.2%, while the margin would have been 29.0%. Net profits advanced 4.8% YoY due to a lower tax reserve and a gain under discontinued operations.
Fibra Inn posted solid 4Q24 results. Total revenues were up 6.2% YoY mainly due to a 6.9% increase in lodging revenues, supported by an 11.3% ADR rise, partially offset by a 3.5 PP drop in occupancy levels to 60.0%. NOI grew 3.2% YoY because of higher operating expenses. However, FFO was up 162.9% YoY driven by a 61.3% reduction in non-operating expenses, including a 73.4% fall in administrative expenses. FFO margin registered a 12 PP expansion to 20.2%. In addition, AFFO advanced 255.2% YoY, while the margin improved 11.7 PP to 16.7%.
Hotel reported very positive 4Q24 results with revenues up 22.3% YoY. The main driver was the owned hotel business, which benefited from a 10.3% ADR rise, largely due to the depreciation of the Mexican peso, a 1.3 PP increase in occupancy levels, and a higher number of rooms in operation as a result of the reopening of the Krystal Beach Acapulco hotel. Food and beverage also contributed with a solid performance. EBITDA grew 47.6% YoY to MXN$266.2 million. Net profits stood at MXN$17.2 million in the period, significantly higher than MXN$5.2 million in 4Q23.
FHipo reported mixed 4Q24 results. Adjusted financial margin was up 4.9% YoY, supported by lower interest paid, given the deleveraging strategy, and provisions. Adjusted financial margin as a percentage of interest gains improved to 56.06% in 4Q24, from 49.72% in 4Q23. However, FHipo recorded an MXN$18.2 million decrease in the valuation of benefits receivable on securitization transactions as INFONAVIT updated the VSM-denominated mortgages to a 0% rate. This, in conjunction with higher expenses, led to a 73.8% net profit reduction to MXN$52.3 million.
OTHER COMPANIES
Pemex reported a MXN$621 billion net loss in 2024, the worst loss since 2015, mostly due to FX losses and asset write-offs.
The Home Depot plans to invest US$1.3 billion during the 2025-2028 period to open five new stores per year. The home improvement company expects to generate 20 thousand new jobs.
AstraZeneca plans to invest MXN$600 million in the expansion of its Guadalajara Global Innovation and Technology Center (GITC) in 2025. Such an expansion is expected to create 600 new direct jobs.
TRADE AND ECONOMICS
Mexico’s final 4Q24 GDP grew 0.5 YoY, which translated into a 1.5% expansion in 2024 GDP, the lowest level in the last four years, INEGI reported. Both figures were revised down from the original estimates of +0.6% YoY and 1.7%, respectively.
Inflation was 0.15% in the first half of February, according to INEGI, which was slightly lower than the 0.17% consensus forecast of the Citi Mexico Expectations Survey. However, the core inflation rate for the period was 0.27%, marginally higher than the consensus prediction of 0.25%. The last 12-month inflation rate stood at 3.74% while the last 12-month core inflation rate was 3.63%, from 3.59% and 3.66%, respectively, in January.
The IGAE was down 1.0% MoM (seasonally adjusted) in December, INEGI reported, which was the lowest level since January 2024. It was dragged down by the declines of 2.0% in primary activities, 1.4% in secondary activities and 0.8% in tertiary activities. The IGAE also fell 0.4% YoY (original data), the weakest level since June last year, mainly as a result of an 8.0% contraction in primary activities and a 2.7% reduction in secondary activities, which were partially mitigated by a 1.3% increase in tertiary activities.
Mexico recorded a US$4.6 billion trade deficit in January 2025, according to INEGI. Exports were up 5.5% YoY to US$44.4 billion (non-oil +8.7% and oil -40.6%) while imports grew 5.9% YoY to US$49.0 billion (non-oil +6.0% and oil +5.0%).
Foreign direct investment peaked at US$36.9 billion in 2024, which was 2.3% higher against the previous year, according to the Economy Ministry. However, this included US$28.7 billion in reinvestments, US$5.0 billion in intercompany operations and US$3.2 billion in new investments.
Mexico registered a US$6.0 billion current account deficit in 2024, equivalent to 0.3% of GDP, Banco de Mexico reported. The negative current account balance in 2024 derived from the combination of a US$16.3 billion deficit in the balance of goods and services, US$54.0 billion deficit in the balance of primary income and a US$64.3 billion surplus in the balance of secondary income.
The unemployment rate fell to 2.7% in January 2025 from 2.9% in 2024, INEGI reported.
Construction activity increased 0.3% MoM in December (seasonally adjusted), but fell 20.7% YoY (original data), according to INEGI.
President Claudia Sheinbaun signed a voluntary non-binding agreement with more than 1,000 local gasoline stations to keep the price of the Magna gasoline below MXN$24.0/liter over the next 6 months. Internationally-owned gas stations mostly did not sign.
CETES auction: 28-day CETES +7 bps to 9.44%; 91-day CETES -6 bps to 9.19%; 175-day CETES -16 bps to 9.10% and 693-day CETES -26 bps to 9.39%.
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