Vitro Reports First Quarter Growth Despite Decline in Margins

Vitro, one of the world's largest producers and distributors of glass products, has announced 1Q 08 unaudited results. Year over year consolidated sales increased 6.1 percent while EBITDA declined 15.6 percent.

The consolidated EBITDA margin dropped to 12.6 percent from 15.9 percent in the same period last year as natural gas prices increased 23 percent.

Commenting on the results for the quarter, Enrique Osorio, Chief Financial Officer, said 'The fundamentals of our business have not changed, the top line was what we expected, demand was strong and sales were up. In fact, on a comparable basis, sales for the quarter reached an all-time high of $640 million.

Higher energy costs and a temporary decline in production resulting from the planned refurbishing of four glass container furnaces, however, impacted EBITDA for the quarter. But overall, our business remains strong.'

Mr. David Gonzalez, President of Glass Containers, commented, 'Containers sales remained strong posting record comparable sales for a first quarter. Export sales rose almost 14 percent year-over-year, including those to the US market, proving that this is a fairly resilient business. Domestic sales also performed well, up 3.5 percent despite Easter week this year falling in the first quarter compared with the second quarter last year.

‘EBITDA, in turn, decreased 15.1 percent year-over-year largely due to a strong increase in natural gas prices, higher cost of raw materials and the impact of having two cosmetics glass container plants working in parallel as we transition production to our new plant in Toluca. Four furnace repairs this quarter compared to only two last year also contributed to a lower fixed cost absorption,’ continued Mr. Gonzalez.

Commenting on Flat Glass, Mr. Hugo Lara noted, 'Flat Glass sales increased 5.1 percent this quarter. While sales in our US subsidiary declined, sales in Spain continued to grow despite the contraction in residential construction in the country. Auto sales, in turn, increased for both the original equipment manufacturing and auto glass replacement markets. EBITDA for the quarter, however, fell by 15.7 percent affected by higher energy and raw materials costs. Following our strategy to extend our European presence, on April 1st, 2008 we purchased a small glass company in Paris for 3.6 million Euros. This company, now called Vitro Cristalglass France SAS, is dedicated to the transformation and commercialisation of value added glass for the commercial and residential markets.'