Grupo KUO SAB de CV
BMV:KUOB
Grupo KUO SAB de CV
Grupo KUO SAB de CV is a holding company, which engages in the manufacture and sale of consumer business products. The company is headquartered in Mexico City, Mexico, D.F.. The firm holds shares of entities located in Mexico, the United States, Spain, Belgium and China that are engaged in manufacture and sale of consumer business products, including processed food, beverages and pork meat, chemical products and auto parts. Its business includes six strategic business units (SBUs), including Pork Meat, JV Herdez Del Fuerte, JV Synthetic Rubber, Plastics, Transmissions and Aftermarket. The Pork Meat SBU is a producer of pork in Mexico and exporter to Japan and South Korea. The Aftermarket SBU offers engine, power train and brake systems components, and is an exporter of gaskets, seals and joints. Its principal subsidiaries include Keken, S.A. de C.V. and subsidiaries; KUO Consumo, S.A.P.I. de C.V.; Industrias Negromex, S.A. de C.V; Resirene, S.A. de C.V.; Transmisiones y Equipos Mecanicos, S.A. de C.V., and Dacomsa, S.A. de C.V.
Grupo KUO SAB de CV is a holding company, which engages in the manufacture and sale of consumer business products. The company is headquartered in Mexico City, Mexico, D.F.. The firm holds shares of entities located in Mexico, the United States, Spain, Belgium and China that are engaged in manufacture and sale of consumer business products, including processed food, beverages and pork meat, chemical products and auto parts. Its business includes six strategic business units (SBUs), including Pork Meat, JV Herdez Del Fuerte, JV Synthetic Rubber, Plastics, Transmissions and Aftermarket. The Pork Meat SBU is a producer of pork in Mexico and exporter to Japan and South Korea. The Aftermarket SBU offers engine, power train and brake systems components, and is an exporter of gaskets, seals and joints. Its principal subsidiaries include Keken, S.A. de C.V. and subsidiaries; KUO Consumo, S.A.P.I. de C.V.; Industrias Negromex, S.A. de C.V; Resirene, S.A. de C.V.; Transmisiones y Equipos Mecanicos, S.A. de C.V., and Dacomsa, S.A. de C.V.
Revenue Decline: Kuo reported revenue of MXN 9.9 billion for Q1 2018, down 4% versus the previous year, mainly due to lower raw material prices in petrochemicals and weaker demand in the automotive sector.
EBITDA Growth: Despite lower revenue, EBITDA rose 8% year-on-year to MXN 1.4 billion, with an EBITDA margin expanding by 150 basis points to 13.7%, driven by strong consumer and chemical sector performance.
Strong Consumer Sector: The Pork Meat business and Megamex in the US performed well, with higher sales prices, export growth, and expanding store count.
Chemicals Outperformed: The chemical sector saw EBITDA rise 10% with a 230 bps margin expansion, benefiting from a better product mix and cost efficiencies.
Automotive Weakness: Revenues and EBITDA in the automotive sector declined due to lower demand for engine parts and manual transmissions.
CapEx Investment: MXN 885 million in CapEx was executed, mainly focused on Pork Meat and transmission projects, with 86% allocated to growth.
Healthy Leverage: Net debt to EBITDA ratio was 1.8x, and management expects it to rise but remain below the 2.5x target by year-end.
Limited Tariff Impact: Management does not expect US-China pork tariffs to materially impact their business, as exports are concentrated in Japan and South Korea, not China or the US.
