Fixed Income Analysis /

GRUPO KALTEX: Another weak quarter despite EBITDA beat; Reiterate SELL

    Rafael Elias
    Rafael Elias

    Director, Latin America Credit

    Tellimer Research
    15 February 2018
    Published byTellimer Research
    We reiterate our SELL recommendation on Grupo Kaltex’s US$320mn, 8.875% senior secured bonds due 2022, despite the fact that the company handily beat its guidance for EBITDA in the quarter. Aside from its Kaltex Comercial and its Kaltex Energía divisions, all other segments of the business saw revenue deterioration on both a sequential and Y-o-Y basis. A lower level of intercompany eliminations in the quarter helped Kaltex report better consolidated revenues on a sequential basis, but these were still down from the figure reported a year ago.

    We believe that the company still has a lot of work to do in order to manage its costs and pass-through these costs to the end consumer in order to increase revenues and consistently achieve double-digit EBITDA (in US$mn).