Furthermore, the 18.3 percent YoY devaluation of the Mexican Peso vs. the U.S. dollar affected the YoY comparison of the Company's results when converted into dollars (even though, in the long-run it benefits its competitive domestic position over imports, as well as exports). In terms of sales, approximately 50 percent of the Company's sales are domestic, and even though 66 percent of them are dollar-linked, there's a lagged-effect in terms of price increases subsequent to devaluation in certain segments. In terms of costs, approximately 75 percent of the Company's cost structure is dollar-linked.
Highlights for the quarter were as follows: - Consolidated net sales for the quarter declined YoY by 6.2 percent to US$525 million - Consolidated EBITDA for the quarter decreased YoY by 21.8 percent to US$80 million - Consolidated net loss for the quarter of US$15 million, as a result of a non-cash exchange loss of US$23 million, and the absence, when compared to 1Q'02, of the legal tax rate reduction, which benefited deferred taxes last year - Consolidated outstanding debt remained flat QoQ. This includes the net outstanding balance of the proceeds from a medium term note issued on February 2003 for Ps$1.14 billion as well as the additional restricted cash associated with a syndicated facility executed at Flat Glass on 1Q'03 and the temporary repurchase of invoices from an off-balance factoring agreement. -- Consolidated net sales. Sales were affected by the difficult macroeconomic conditions during the first quarter aggravated by the deadlock generated during the pre-war period. The divestiture of Ampolletas on April of 2002 accounted for 23 percent of the YoY decline for the quarter. Also, as mentioned, the 18.3 percent YoY devaluation of the Mexican Peso against the U.S. dollar affected the YoY comparison. Excluding the currency devaluation effect, sales YoY would have decreased by 3.3 instead of a 6.2 percent. Flat Glass' sales declined by 2.0 percent YoY, or US$6 million, mainly within the U.S. non-residential construction segment and the OEM auto market. At Glass Containers, sales declined 10.8 percent, or US$25 million, due to: the divestiture of Ampolletas, which accounted for 32 percent of the decline; the distortion created by the currency devaluation effect, and a particularly cold winter in the U.S. that had a negative impact on beer and soft drink consumption. Glassware' sales decreased by 11.2 percent, or US$7 million, also affected in dollar terms from the currency devaluation effect YoY and by lower sales in the industrial domestic segment. -- Consolidated EBITDA. Assuming constant exchange rates, consolidated EBITDA would have decreased by 18.5 instead of 21.8 percent. In addition, 18 percent of the reduction in EBITDA YoY is attributed to a strategic decision to reduce inventory levels during 1Q'03 vs. 1Q'02. For the quarter, EBITDA at Flat Glass declined YoY by 3.1 percent, or US$1 million, as a result of lower sales. At Glass Containers, EBITDA declined YoY by 30.6 percent, or US$17 million, as the result of lower fixed costs absorption and lower sales. Also, the Ampolletas' divestiture accounted for 10 percent of the decline. At Glassware, EBITDA declined YoY by 49 percent, or US$5 million, as a result of lower fixed costs absorption. -- The Company reported a consolidated net loss of US$15 million, which includes a non-cash exchange loss of US$23 million, compared with a non-cash exchange gain of US$21 million on 1Q'02, and a negative effect on the YoY comparison over taxes of US$12 million resultant of the absence, when compared to 1Q'02, of the legal tax rate reduction which benefited deferred taxes last year. -- On March 31, 2003, consolidated outstanding debt was US$1,576 million. This included the net outstanding balance of the proceeds from the Ps$1.14 billion, six-year, bullet, medium term note (MTN*) issued in the Mexican market on February 13, 2003. It also considers additional restricted cash associated with the execution of a Syndicated Facility at Flat Glass during 1Q'03; the net obligation of a U.S. private placement and the temporary repurchase of invoices from an off-balance factoring agreement. Net of these items plus the proceeds pending to be applied from the MTN issue of Ps$1.0 billion made on December 30, 2002, debt would have decreased YoY by 11 percent and remained flat QoQ. (*) Certificados Bursatiles (1) For analysis purposes, all comments and figures discussed in this announcement are related to amounts in nominal dollars unless otherwise expressed. Certain amounts may not sum due to rounding.
The consolidated financial results, income statement, and cash flows for the three-month period ended March 31, 2002 and for the last twelve months periods ending March 31, 2003 and March 31, 2002, account for Vitromatic, S.A. de C. V. as a discontinued operation. All figures provided in this announcement are in accordance with Generally Accepted Accounting Principles in Mexico, except otherwise indicated. Dollar figures are in nominal U.S. dollars and are obtained by dividing nominal pesos for each month by the applicable exchange rate as of the end of that month. Certain amounts may not sum due to rounding.
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.