MEXICO, Mexichem sales expected

MEXICO, Mexichem sales for the first quarter are expected to hit US$526mn, a 7% increase on 1Q 08

Mexican chemical and petrochemical firm Mexichem (BMV: MEXCHEM) announced Thursday that its sales for the first quarter this year are expected to hit 7.5bn pesos (US$526mn), a 7% increase on 1Q08 in peso terms.

Ebitda for the period is estimated at 1.68bn pesos, up 41% year-on-year, the company said in a filing with the Mexico City bourse (BMV).

In dollar terms Ebitda is forecast to increase 8%. The improved performance is attributed to reduced raw material and energy costs, and the effects of the exchange rate on costs in pesos.

On the other hand debt at the end of March is estimated to be around US$928mn, an increase of US$48mn from end-2008 due to capex of some US$47mn.

Estimated cash in hand at end-Q1 is US$225mn as a result of the amortization of a syndicated loan of US$75mn.

The net debt to Ebitda ratio is expected to be 1.42. "The first quarter of the year, despite the macroeconomic conditions, was better than we had estimated due to our geographic diversification and products that proved to be a competitive advantage for Mexichem as well as the boost provided by infrastructure projects in Latin America, which indicates we are taking the appropriate steps," said company CEO.

"The volatility of raw materials has decreased significantly and there seems to be signs this is also happening with Latin American currencies; the results of the quarter show a trend where we can see an improvement in margins and at the same time the effect of the natural foreign exchange hedging we have due to selling close to 80% of our products in dollars," said corporate development director.

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