Consolidated sales rose 2.1 percent YoY. Excluding Vitro Fibras (VIFISA) and Vitro American National Can (VANCAN), divested in March and September 2004, respectively, consolidated sales increased 6.6 percent. EBITDA at Glass Containers grew YoY 8.8 percent and 4.6 percent at Flat Glass. Consolidated EBITDA, however, fell YoY 10 percent with margins down 2 percentage points to 15.3 percent. On a comparable basis, consolidated EBITDA declined 2.0 percent, with margins down 1.3 percentage points to 15.3 percent.
Federico Sada, Chief Executive Officer, noted: "Our 2004 results reflect the effectiveness of the "Glass Focus" strategy. For the first time in 6 years, in a comparable basis, Vitro reported an increase in EBITDA."
Alvaro Rodriguez, Chief Financial Officer, commented: "For the second consecutive quarter, on a comparable basis, all business units reported sales growth. Flat Glass sales for the quarter rose 5.4 percent YoY, with Glass Containers up 8.1 percent and 7.4 percent at Glassware."
"This past year proved to be a turning point for Vitro. We achieved growth in sales and EBITDA and reduced our net debt. This is what the market wanted to see and we did it."
"And as expected, Flat Glass turned in an excellent performance for the quarter with comparable EBITDA up by 24 percent YoY," Mr. Rodriguez continued.
Mr. Rodriguez said, "In line with our glass strategy, in the last 16 months we divested three non-glass companies and with the exception of one small business, have clearly reached our goal. We will continue to concentrate resources on building our market position in the glass industry."
Mr. Rodriguez commented, "But one of the most important achievements during 2004 was the reception Vitro received in the capital markets. The best evidence is that as of February of 2005, over the past 15 months, we raised close to a billion dollars in long-term funds in the international debt markets. On February 4, 2005 Vitro Envases Norteamerica, successfully issued US$80 million senior secured notes due 2011 that were close to three times oversubscribed. In an environment of increasing interest rates, the notes were placed at a 1.75 percentage points lower yield than the same notes issued last summer, evidence of the market's growing confidence in Vitro. In addition, on February 24 we expect to close a US$150 million secured term loan at VENA with a five year maturity and a spread of 625 basis points over LIBOR. The proceeds will be used to pay down the outstanding amount of the original US$230 million loan at VENA. The result of these two transactions will be a significant reduction in Vitro's cost of funds and an increase of the average life of debt
to 4.4 years."
Mr. Rodriguez concluded, "When we reviewed our 2004 expectations, over a year ago, we told you that we would continue to strengthen our balance sheet, improve access to capital, focus on core businesses, selectively pursue niche markets, reduce costs and improve productivity. And we are delivering."
All figures provided in this announcement are in accordance with Generally Accepted Accounting Principles in Mexico, except otherwise indicated. Dollar figures are in nominal US dollars and are obtained by dividing nominal pesos for month by the end of month fix exchange rate published by Banxico. In the case of the Balance Sheet, US dollar translations are made at the fix exchange rate as of the end of the period. The exchange rate as of October 31, 2004 was 11.5390, as of November 30, 2004 was 11.2373 and as of December 30, 2004 was 11.1495 pesos per US dollar. Certain amounts may not sum due to rounding. All figures and comparisons are in USD terms, unless otherwise stated.
This announcement contains historical information, certain management's expectations and other forward-looking information regarding Vitro, S.A. de C.V. and its Subsidiaries (collectively the "Company"). While the Company believes that these management's expectations and forward looking statements are based on reasonable assumptions, all such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated in this report. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political, governmental and business conditions worldwide and in such markets in which the Company does business, changes in interest rates, changes in inflation rates, changes in exchange rates, the growth or reduction of the markets and segments where the Company sells its products, changes in raw material prices, changes in energy prices, particularly gas, changes in the business strategy, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not assume any obligation, to and will not update these forward-looking statements. The assumptions, risks and uncertainties relating to the forward-looking statements in this report include those described in the Company's annual report in form 20-F file with the U.S. Securities and Exchange Commission, and in the Company's other filings with the Mexican Comision Nacional Bancaria y de Valores.