Report of the Management to the Board of Directors on the results of fiscal year 2015
During 2015, Grupo Carso’s consolidated sales increased by 7.1% to reach Ps. 88,224 million; Ps. 5,836 million more than the previous year. This increase was mainly explained by the performance of the three traditional divisions of the group. Revenues at our commercial business increased by 7.8% and the industrial division saw a 3.8% growth in the year, while our industrial and construction activity grew 11.4% against the previous year, respectively. Carso Energy revenue contribution began in 2014.
Increased profitability was mainly brought by Grupo Condumex and to a lesser extent due to Grupo Sanborns and Carso Infraestructura y Construcción, which jointly contributed to record a 13.6% increase in operating income which amounted to Ps. 10,329 million. It is worth mentioning that the projects and specific initiatives undertaken in the group’s divisions generated this result.
For the year, the EBITDA margin was 14.2%, improving 130 basis points if compared against the margin recorded in the previous year.
In terms of financing results, a 12.2% reduction in the Comprehensive Cost of Financing took place to reach Ps. 927 million in the year against the Ps. 1,056 million figure recorded in 2014.
As a result of the improved operating performance, Grupo Carso’s controlling net income increased by 9.0% in 2015, reaching Ps. 6,196 million. This compared favorably against the Ps. 5,685 million figured recorded in 2014. The net margin remained at 7.0%, the same level if compared with the previous year.
As of December 31, 2015, indebtedness fell by 4.0% to reach Ps. 7,412 million. Short-term maturities represented 33.0% of the total debt. Net debt was negative Ps. 3,351 million, including a reduction of 23.6% in cash and short term investments, an effect that is explained by: i) the beginning of the construction of the gas pipelines by Carso Energy; ii) the opening and remodeling of Grupo Sanborns stores; and iii) the payment of dividends. Net debt to LTM EBITDA ratio was a negative 0.27 times, while the interest coverage ratio stood at 32.2 times if measured in terms of EBITDA to interest expense.