Record EBITDA and 2022 guidance to the upside
Favorable price environment and higher than expected margins boosted EBITDA, prices at record levels in both Polyester and Plastic & Chemicals. Financial strength remains remarkable
Alpek increased its comparable EBITDA guidance by 21% to $1.250 billion, given the margin strength, which should be welcomed by the market. We reiterate our BUY recommendation (FV/EBITDA 3.5x)
Higher than expected results, due to margins strength. Alpek reported a revenue growth of 45.8% y/y to MXN 47.877 billion and an EBITDA of 42.1% to MXN 9.368 billion, well above market expectations. This led to a barely EBITDA margin contraction of 0.5pp y/y, but with a sequentially recovery of 7.1pp to 19.6%. Although, EBITDA includes a positive effect due to an inventory gain and raw materials carry-forward effect of ~ MXN 2.553 billion ($123 millions) given the rise of more than 20% q/q in Brent prices and related raw materials, on comparable basis the increase was close to 65% y/y to stand at MXN 6.814 billion, slightly above our estimates. This, was favorably supported by surprising margins in (1) Polyester, underpinned by stronger demand, the spread normalization between North America-Asia, as well as the resilient reference margins in Asia, averaging levels of $420 per Ton (-3% q/q) due to higher transportation costs and (2) Polypropylene and EPS given a favorable demand and supply environment and the import parity pricing from Asia which remain higher -look Pag 3. Alpek increased its 2022 Guidance reaffirming favorable environment dynamics. The results confirmed the company’s positive outlook supported by better environment prices and an appropriate operation and acquisition optimization strategy. Given the better-than-expected margins, Alpek increased its 2022 guidance to $1.365 million (+19% y/y) in 2022e EBITDA, and in comparable basis from $1.031 billion to $1.250 billion (+21%). With a remarkable financial strength (ND/EBITDA 1.0x) and an interesting valuation (FV/EBITDA 3.5x vs 3.9x previous), we reiterate our BUY recommendation.
