Alfa SAB Reports Strong Q3 with Strategic Spin-Off Plans

Alfa SAB de CV Class A ( (ALFFF) ) has realeased its Q3 earnings. Here is a breakdown of the information Alfa SAB de CV Class A presented to its investors.

Alfa SAB de CV Class A is a multinational conglomerate primarily involved in the food industry through its subsidiary Sigma, and the petrochemical industry via its subsidiary Alpek, both with significant global operations. The company is undergoing a strategic simplification process, focusing on its food business, Sigma.

The latest earnings report for the third quarter of 2024 highlights Alfa’s solid financial performance, with a reported EBITDA of $275 million, a 13% increase compared to the same period last year. The company is actively working towards the spin-off of its petrochemical unit, Alpek, which has been classified as a discontinued operation in preparation for its listing as a separate entity.

Key financial metrics for Sigma include a notable 14th consecutive quarterly sales growth, with a record 465 kilotons in volume and an accumulated EBITDA of $824 million, marking a 24% increase year-on-year. Additionally, Alfa has successfully advanced a capital increase of approximately $400 million, which will aid in reducing parent-level debt by $575 million. Alpek, despite being a discontinued operation, reported a 37% year-on-year increase in comparable EBITDA to $218 million, further enhancing Alfa’s financial position.

Looking forward, Alfa’s management remains optimistic about the company’s strategic direction, emphasizing the potential unlocked by the spin-off process. This transformation is anticipated to allow investors direct access to a focused and growing food business, while Alpek’s independence is expected to enhance shareholder value. The completion of the Alpek spin-off is anticipated by 2025, setting the stage for both entities to pursue independent growth trajectories.