Author picture

What did we learn from 2Q21 Mexican corporate earnings?

This week we’re taking a look at 2Q21 Mexican corporate earnings results, based on research from GBM and Miranda Global Research (MGR). Validating the strong performance of the stock market this year, overall, results were good for the quarter, mainly due to the relaxation of COVID-19 restrictions compared to a year ago when mobility was highly constrained, but also helped by booming commodity and chemical prices. 


According to the GBM Research Sample, revenues were up by 16.1% compared to 2Q20, and EBITDA was up an astounding 40.7%. MGR’s sample of 63 listed companies showed a revenue increase of 17% and EBITDA expansion of 46%. Clearly the low base a year ago explains the strong growth: nonetheless the quarter did slightly beat analyst expectations; overall revenue came in 2.1% higher and EBITDA was 6.3% above GBM estimates. From GBM’s research sample of 59 companies, 17 had sales that were 5% higher than their estimates, and only 5 companies had sales that were 5% lower. 



Media and Telecom: 

According to MGR, sales for the sector grew by 2% and EBITDA by 5% against last year, more modest than the sample growth as the sector was open for business a year ago. Nonetheless AMX added 4.2mn subscribers, a strong number. The sector did well against forecasts, and stocks performed strongly after reporting. America Movil had a YoY EBITDA gain of 2.7%, which was 6.3% above GBM (6.7% vs. 2019). Axtel, exceeded EBITDA expectations by over 10%, with EBITDA up 0.8% vs 2Q20. Mega posted impressive gains in EBITDA 10% and 12.3%, compared to the same quarters of 2020 and 2019. However, this result was slightly below GBM expectations (-0.3%).



The food sector faced tough comparisons, as the pandemic artificially boosted demand a year ago, and overall saw flat sales, and an 11% EBITDA growth against a year ago, according to MGR. Also, the appreciation of the Mexican peso impacted Peso sales for food multinationals such as Bimbo and Gruma. Compared to 2Q20, Bimbo’s revenue was only down -3% and EBITDA was up 6% (+37% compared to 2Q19). Their EBITA results surpassed GBM expectations by 11.2% and 14.5%, respectively. The rest of the food sector companies (Herdez, Lala, Gruma, Bachoco), were more than 5% below GBM expectations for the quarter, even though on absolute terms Bachoco reported impressive growth. 


Bottlers and Spirits:

The sector had a good quarter, driven by Femsa, benefiting from the reopening of OXXO stores. Sales expanded by 16% and EBITDA by 26%, according to MGR. Cuervo surpassed revenue expectations for 2Q21, but EBITDA came in 10% below. They were also up against a difficult comparison basis due to the home consumption tequila sales surge in the USA at the beginning of the pandemic, and then an artificial reduction in AMP costs. 


Supermarket,  Specialized Retail, Restaurants

The Supermarket retail had tough comps as a year ago they were almost the only place to shop. Still sales were up 2% and EBITDA 11%, according to MGR. Specialized retail on the other hand saw sales grow by 93% and EBITDA turned positive. Sanborns and Liverpool were up 197.1% and 154.6%, respectively. However, they both came in slightly below GBM estimates. Alsea reported far stronger than expected results, with Mexico back to 2019 levels of profitability, as the company’s digital sales strategies paid off.  


Banks and Financials: 

Gentera was the only bank in the category to surpass expectations, most were more than 5% below expectations. 



Airport groups are another category that was heavily impacted by the pandemic. So the 2020 comparison basis is not that meaningful and difficult to estimate. None of the airport groups (ASUR, GAP, and OMA) have returned to pre pandemic traffic levels. Nonetheless, GAP was able to surpass pre pandemic revenue and EBITDA, by 11.4% and 15.2% respectively, even with lower traffic. Volaris reported stellar results, nearing 2019 levels.


Real Estate FIBRAs: 

The real estate category had mixed results. Retail and office continued to struggle, while industrial performed strongly again. Prologis Property and Vesta surpassed revenue and EBITDA expectations for both 2020 and 2019 comparison bases, by more than 5%. 


Conglomerates, chemicals, industrials and mining:

These sectors performed exceptionally well, as commodity and derivative prices rose strongly against the depressed levels a year ago. MGR’s mining sample saw EBITDA increase by 93%, and the conglomerate sector more than doubled its EBITDA, led by Orbia, and Alfa in the petrochemical sector.


Cement & Housing:

Construction is booming, and the cement category (CEMEX, GCC, and CMOCTEZ) surpassed GBM expectations by over 5% in almost all metrics, for both 2020 and 2019 comparison bases. Revenue and EBITDA were also positive YOY for all of companies, for both comparison years. Housing saw a big bounce back, with the sector showing a 27% revenue increase and 36% EBITDA growth. 

Contacts at Miranda Partners

Damian Fraser
Miranda Partners

Ana María Ybarra Corcuera