Grupo Elektra Announces 10% EBITDA Growth to Ps.1,360 Million in 3Q09

- EBITDA margin grows to 13%

MEXICO CITY, Oct. 26 /PRNewswire-FirstCall/ -- Grupo Elektra, S.A. de C.V.
(BMV: ELEKTRA; Latibex: XEKT), Latin America's leading financial services
company and specialty retailer, reported today its financial results for the
third quarter of 2009.
"We achieved a double digit increase in consolidated EBITDA and enhanced
profitability of Grupo Elektra in an adverse economic environment, thanks to
strategies to stimulate operational efficiency," said Carlos Septien, Chief
Executive Officer of Grupo Elektra and Banco Azteca. "We controlled every
expense, paying attention to the necessary expenditures to consolidate our
market leadership. At the same time, we strengthened the balance and number of
savings accounts for increased credit and sales going forward."
Consolidated Third Quarter Results
Consolidated revenue was Ps.10,110 million, compared to Ps.10,226 million
for the same quarter last year. Costs and operating expenses were Ps.8,751
million, from Ps.8,994 million in the same period of the prior year.
Grupo Elektra reported EBITDA of Ps.1,360 million, 10% more than the
Ps.1,233 million of the third quarter of 2008. The EBITDA margin was 13% this
period, one percentage point above that of last year. The company registered
a net loss of Ps.418 million, compared to net income of Ps.673 million a year
ago.
Consolidated Revenue
The 1% decrease in consolidated revenue was the result of a 3% decrease in
commercial revenue and unchanged financial revenue.
Costs and Expenses
Consolidated costs were Ps.5,220 million, 2% lower than the Ps.5,351
million reported in the same period a year ago.
Consolidated costs include the financial cost -- which represents the
creation of loan loss reserves and the interest paid to depositors on savings
-- and the commercial cost, which mainly represents the cost of goods sold.
Consolidated operating expenses were Ps.3,531 million, compared to
Ps.3,643 million for the same period a year ago.
The minor expenses were due to initiatives to further enhance operating
efficiency in each company area, and were achieved amidst solid expansion in
Central and South America and Mexico.
EBITDA and Net Result
Consolidated EBITDA was Ps.1,360 million, 10% higher than the Ps.1,233
million reported a year ago; the EBITDA margin for the quarter was 13%,
compared to 12% for the previous year.
The principal changes below EBITDA were i) an increase of Ps.1,116 million
in other financial expenses -- which reflects a loss of 11% in the market
value of underlying financial instruments that the company holds and doesn't
imply cash flow, ii) a reduction of Ps.551 million in foreign exchange profit,
due to a modest devaluation of the peso this quarter, and iii) a Ps.600
million reduction in tax provisions, due to favorable deferred taxes this
period, as a result of the loss of the underlying financial instruments.
The company reported net loss of Ps.418 million compared to net income of
Ps.673 million a year ago.
Cash and Cash Equivalents
As of September 30, 2009, total cash and cash equivalents were Ps.61,823
million, 35% higher than the Ps.45,772 million of the prior year, mainly due
to higher investment levels of the financial business. At the end of the
quarter, the cash and investments balance for the financial business was
Ps.38,682 million, and for the commercial business was Ps.23,141 million.
Consolidated Loan Portfolio
As of September 30, 2009, the gross consolidated portfolio for Banco
Azteca Mexico, Banco Azteca and Elektrafin Latin America was Ps.25,257
million, compared to Ps.25,228 million for the prior year.
Financial Business
Banco Azteca Mexico
During the third quarter, revenue from Banco Azteca Mexico was Ps.4,370
million, compared to Ps.4,746 million reported a year ago. The financial cost
for the bank during the quarter was Ps.1,094 million, 40% less compared to
Ps.1,832 million reported the previous year.
As of September 30, 2009, the capitalization index of Banco Azteca was
14.4%. The company considers the index to be at a level that optimizes equity
profitability.
The gross portfolio was Ps.20,848 million, compared to Ps.22,281 million
reported on September 30, 2008.
At the end of the quarter, the bank registered a total of 9.6 million
active credit accounts; the large customer base is an additional strength of
the bank that further reduces credit risk. The average term of the credit
portfolio for principal credit lines -- consumer, personal loans and Tarjeta
Azteca -- was 61 weeks at the end of the third quarter 2009, unchanged from
the prior year.
Deposits of Banco Azteca Mexico were Ps.48,076 million at the end of the
third quarter of 2009, 10% more than the Ps.43,846 million of the previous
year. At the end of the period, the bank had a total of 8 million active
savings and deposit accounts, a 21% increase from 6.6 million accounts at the
end of the same period a year ago.
Seguros Azteca
Grupo Elektra's insurance companies -- Seguros Azteca Vida and Seguros
Azteca Danos -- reported added revenue of Ps.316 million in the quarter, total
assets of Ps.1,868 million as of September 30, 2009, and shareholders' equity
of Ps.988 million, 6% higher than the Ps.929 million reported a year ago.
Afore Azteca
As of September 30, 2009, Siefore Azteca's assets under management were
Ps.10,152 million. Total assets were Ps.286 million and shareholders' equity
was Ps.248 million.
Commercial Business
Revenue from commercial business in the quarter was Ps.4,712 million,
compared to Ps.4,840 million reported a year ago.
As of September 30, 2009, total debt with cost of the commercial business
was Ps.7,237 million, compared to Ps.5,962 million reported a year ago. The
net cash of the commercial business -- excluding debt -- was a positive
Ps.15,904 million, 19% higher compared to a positive balance of
Ps.13,318 million as of September 30, 2008.
Of the total debt of the commercial business, 93% is denominated in pesos,
in line with most of the earnings of the company, with a weighted average
interest rate of 7.7%. The remaining 7% of the debt denominated in foreign
currency is covered with operations on the asset side in the same currency,
which minimizes foreign exchange risks.
Expansion
The company has a large distribution network, which allows closeness to
customers, and provides a superior market position in Mexico and in Latin
America. Grupo Elektra grew 2% to 1,999 points of sale as of September 30,
2009. Most of the growth came from Central and South America, where points of
sale increased 8%, to 442 points of sale; while the number of units in Mexico
grew 1%, to 1,557.
Nine Month Consolidated Results
Total consolidated revenue for the first nine months of 2009 was
Ps.31,515 million, 2% higher than the Ps.30,974 million a year ago. The
company reported EBITDA of Ps.4,270 million, compared to Ps.4,368 million
reported in the same period a year ago; the EBITDA margin in the first nine
months of 2009 was 14%, unchanged from the prior year. Grupo Elektra
registered net income of Ps.1,284 million, compared to Ps.2,645 million for
the first nine months of 2008.
Company Profile:
Grupo Elektra (www.grupoelektra.com.mx) is Latin America's leading
financial services company focused on the mass market. The Group operates
close to 2,000 points of sale in Mexico, Brazil, Guatemala, Honduras, Peru,
Panama, El Salvador and Argentina. Grupo Elektra also sells and markets its
consumer finance, banking and financial products and services through Banco
Azteca branches located in Mexico, Brazil, Panama, Guatemala, Honduras, Peru
and El Salvador.
Grupo Elektra is a Grupo Salinas company (www.gruposalinas.com), a group
of dynamic, fast-growing, and technologically advanced companies focused on
creating shareholder value, contributing to build the middle class of the
countries in which they operate and improving society through excellence.
Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com),
Grupo Salinas operates as a management development and decision forum for the
top leaders of member companies. The companies include TV Azteca
(www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra
(www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Afore Azteca
(www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx) and Grupo
Iusacell (www.iusacell.com.mx). Each of the Grupo Salinas companies operates
independently, with its own management, board of directors and shareholders.
Grupo Salinas has no equity holdings. However, the member companies share a
common vision, values and strategies for achieving rapid growth, superior
results and world-class performance.
Except for historical information, the matters discussed in this press
release are forward-looking statements and are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Other risks that may affect Grupo Elektra and its subsidiaries are
identified in documents sent to securities authorities.
Investor Relations

Bruno Rangel
Grupo Salinas
Tel. +52 (55) 1720 9167
jrangelk@gruposalinas.com.mx

Fernanda Gonzalez-Rul
Grupo Elektra S.A. de C.V.
Tel. +52 (55) 1720 1339
fgrul@gruposalinas.com.mx

Press Relations

Tristan Canales
Grupo Salinas
Tel. +52 (55) 1720-1441
tcanales@gruposalinas.com.mx

Daniel McCosh
Grupo Salinas
Tel. +52 (55) 1720-0059
dmccosh@gruposalinas.com.mx

SOURCE Grupo Elektra, S.A. de C.V.

Investors, Bruno Rangel, Grupo Salinas, +011-52-55-1720-9167,
jrangelk@gruposalinas.com.mx; or Fernanda Gonzalez-Rul, Grupo Elektra, +011-
52-55-1720-1339, fgrul@gruposalinas.com.mx; or Press, Tristan Canales, Grupo
Salinas, +011-52-55-1720-1441, tcanales@gruposalinas.com.mx, or Daniel McCosh,
Grupo Salinas, +011-52-55-1720-0059, dmccosh@gruposalinas.com.mx