The company's results surprised favorably with a significant recovery in all business segments, highlighting Dura-Line, Polymer Solutions and Koura
Despite the challenges, the strategies implemented have mitigated cost pressures. The dynamics remain favorable, therefore Orbia raised its 2022 EBITDA guidance ~9% to $1.900 billion
Positive results, above expectations. 1Q22 results reflected a favorable PVC price environment and significant demand recovery mainly in all business segments. The most relevant was the sequential profitability recovery in most divisions despite higher raw materials and freight costs (logistic and distribution challenges in Europe). Dura-line segment showed the most important advance in annual terms supported by North America recovery along with more favorable price dynamics. On the other hand, Polymer Solutions continued to present outstanding results in the face of the PVC price environment given the supply and demand global imbalance that continues, with a sustained recovery in the construction industry, but with some sequential pressures due to the increase in costs that could not be completely transferred to prices. In Koura, demand recovery and a more beneficial price dynamic offset the above-mentioned pressures in general. Finally, Netafin and Wavin, sequentially margins advance stood out, given the impact that higher costs have had on operations. In this context, revenues increased 35.6% y/y to$2.596 billion, while EBITDA increased 35.4% y/y to $611 million. We will be focused to long-term perspective details at the ‘Investor Day’ on May 17th. We believe the report will be welcomed by the market, not only for the company’s guidance rise, but also because of the implemented strategies to mitigate latent challenges. Financial structure remains strong (ND/EBITDA at 1.7x) and we highlight an interesting valuation at FV/EBITDA of 4.3x vs 4.5x previous. We reiterate our BUY recommendation.