Printer Friendly

EMPAQUES PONDEROSA, S.A. REPORTS NINE MONTH RESULTS

 EMPAQUES PONDEROSA, S.A. REPORTS NINE MONTH RESULTS
 NEW YORK, Oct. 30 /PRNewswire/ -- Empaques Ponderosa, S.A. (Mexican


Stock Exchange: EMPAQ), Mexico's largest producer of folding paperboard from recycled materials, today reported its accumulated results for the third quarter ended Sept. 30, 1992. Net income decreased 32.6 percent to 25,353 million Mexican pesos (US$8.2 million (A)) from 37,596 million ($12.1 million) during the same period of 1991. Cumulative earnings per ADR declined to $.54, from $.80 in 1991.
 Sales volume increased by 6.8 percent during the third quarter of 1992, compared to the same period last year. Sales volume fell 2.8 percent on an accumulated basis, resulting from a scheduled 28-day plant shutdown to increase the speed of the company's paperboard machine and increase productivity. Empaques experienced a market share decline during the first semester as a result of this shutdown. The company began to recover its market share in the third quarter.
 Third quarter net sales performance approximated last year's results because Empaques was able to increase tonnage sales to offset the real price loss due to the overvalued peso. However, on an accumulated basis, a price loss in real terms in addition to the plant shutdown reduced accumulated net sales 7.8 percent to 175,085 million pesos ($56.4 million), from 189,957 million pesos ($61.2 million) in 1991.
 Accumulated gross profit declined 25.3 percent from 72,411 million pesos ($23.3 million) to 54,078 million pesos ($17.4 million) in 1992 due to a reduction in net sales and to an increase in operating costs and other expenses. Costs of goods sold increased because maintenance and scrap costs were higher than 1991 levels. These increases were in turn a function of the personnel learning curve associated with increasing capacity. Gradually, costs associated with the process of increasing capacity will disappear as the paperboard machine operation stabilizes. To respond to customers' evolving needs, Empaques is using chemical products that improve quality, but are more costly.
 Operating profit decreased by 37.5 percent, from 60,897 million pesos ($19.6 million) in cumulative third quarter 1991, to 38,061 million pesos ($12.3 million) for cumulative third quarter 1992. Operating expenses increased following the decentralization of Empaques Ponderosa when the company hired additional personnel to perform administrative functions previously undertaken by the holding company, Ponderosa Industrial. This increase in operation costs was offset by the cancellation of royalty payments to Ponderosa Industrial commencing September 1991, and was reflected in a decrease in the "Other Financial Operations" account. During this period, Empaques Ponderosa incurred non-recurring consulting expenses for marketing research and counsel on optimization of management.
 The integral financing cost continues to be favorable, due to higher interest income and a lessening of the exchange loss from lower slippage of the peso. The net favorable effect on the Integral Financing Cost Account amounts to $1,500 million pesos. This return was achieved despite a higher level of accounts receivable reflecting a lower liquidity in the domestic market. Taxes and Employee Statutory Profit sharing decreased by 25.1 percent, as a result of lower earnings.
 Obtaining low cost loans for raw material imports and finished product exports increased current liabilities 7.3 percent.
 The company is currently negotiating a three-year Euro Note with Chase Manhattan Bank. This debt placement will allow long-term debt to be restructured at lower cost, reducing interest expenses and freeing significant cash flow.
 The global and U.S. recessions have reduced product demand, resulting in lower prices and directly impacting domestic industry.
 Empaques has also been affected by the Mexican Government's policy efforts to reduce inflation. The objective of "single digit inflation" will not be achieved; however, this policy will significantly affect domestic growth, particularly in the industrial sector.
 The appreciation of the peso against the U.S. dollar during the year affected the company in two ways: it reduced Empaques' competitiveness in the export market, and it created a price loss in real terms in the domestic market. This situation has been compounded by the depth and the duration of the recession in the United States.
 Despite these economic obstacles, Empaques expects to surpass its 1991 market position and meet its production objective of 142,000 tons per year in 1993, as new capacity is achieved.
 (A) -- Exchange rate, constant Mexican pesos and U.S. dollars: 3,102.
 -0- 10/30/92
 /CONTACT: Humberto Cano, strategic planning manager - investor relations, 52-14-18-08-98, or Guillermo Fernandez, director, 52-467-21168 or 52-5-211011, both of Empaques; or Jorge Marcos, director - corporate finance and administration of Ponderosa Industrial, S.A. de C.V., 52-14-18-08-98, all in Mexico/ CO: Empaques Ponderosa, S.A. ST: IN: PAP SU: ERN


GK-OS -- NY030 -- 7053 10/30/92 10:52 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 30, 1992
Words:796
Previous Article:FBS MORTGAGE CORP. CERTIFICATES SERIES 1992-E RATED 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --
Next Article:CHECK TECHNOLOGY CORPORATION EXPANDS INTO LITHUANIA AND THE PHILIPPINES
Topics:


Related Articles
EMPAQUES PONDEROSA REPORTS RECORD 1991 FINANCIAL RESULTS
EMPAQUES PONDEROSA, S.A. REPORTS 1992 RESULTS
EMPAQUES PONDEROSA, S.A. REPORTS IMPROVED FIRST SEMESTER 1993 RESULTS
EMPAQUES PONDEROSA, S.A. REPORTS YEAR-END RESULTS FOR 1993
EMPAQUES PONDEROSA REPORTS IMPROVED ACCUMULATED NINE MONTH 1994 OPERATING RESULTS
/ C O R R E C T I O N -- EMPAQUES PONDEROSA /
EMPAQUES PONDEROSA REPORTS 1994 YEAR END RESULTS
EMPAQUES PONDEROSA REPORTS FIRST QUARTER 1995 RESULTS
EMPAQUES PONDEROSA REPORTS THIRD QUARTER 1995 RESULTS
EMPAQUES PONDEROSA REPORTS SECOND QUARTER 1996 RESULTS NET INCOME INCREASES 114.7% TO Ps. 106.3 MILLION

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters