Grupo Elektra, the financial services and specialty retail company under Grupo Salinas, ended 2024 on a mixed note, with solid financial performance indicators overshadowed by significant losses linked to its stock market activities. The company reported consolidated revenues of 57.79 billion pesos for the fourth quarter of 2024, marking a 10% increase from 52.65 billion pesos during the same period of 2023. This growth was driven primarily by a 13% rise in financial income, which reached 33.24 billion pesos, alongside a 6% increase in commercial sales amounting to 24.55 billion pesos.
Banco Azteca, one of Grupo Elektra's key business units, demonstrated strength by reporting a 12% growth in its gross portfolio by year-end, alongside a reduction in its delinquency rate to 4.4% from 4.7% the previous year. This improvement indicates not only enhanced credit quality but also effective risk management strategies.
The group saw its EBITDA soaring to 7.44 billion pesos, representing a significant 57% year-over-year increase compared to 4.73 billion pesos recorded for the fourth quarter of 2023. This surge can be attributed to decreased expenses related to the impairment of intangible assets within Purpose Financial, its U.S. financial subsidiary.
Despite these positive indicators, Grupo Elektra faced substantial challenges, highlighted by its reported net loss of 11.66 billion pesos for the same quarter, translating to over 11 billion pesos lost due to stock market ramifications. The conglomerate experienced negative financial variation of 20.21 billion pesos linked to its investment portfolios at the Bolsa Mexicana de Valores (BMV). The commencement of trading following a suspension due to allegations of fraud connected to CEO Ricardo Salinas Pliego’s dealings with Astor Asset Management triggered the significant decline.
The company's stock had been suspended for four months amid probes, and upon resuming its trading at the beginning of December 2024, it faced one of the most severe drops on record, contributing to the reported losses.
On December 27, Grupo Elektra announced its intention to privatize and exit the BMV after nearly 31 years of trading on the exchange. This decision, supported by Salinas Pliego and shareholder approval, involved seeking cancellation of registration for its capital stock on the National Securities Registry, pending approval from the Comisión Nacional Bancaria y de Valores (CNBV).
The backdrop to these financial adjustments involves prolonged litigation against the Servicio de Administración Tributaria (SAT) related to tax matters as well as the Supreme Court involvement, which has affected the company’s financial positioning and market perception.
The disparities between Grupo Elektra's revenue growth and the staggering losses indicate complex operational challenges amid broader economic conditions, making it one of the most closely watched companies within Latin America's corporate sphere.
Nevertheless, Grupo Elektra’s operational results reflect improvements and greater efficiency across both its financial and commercial businesses. The company’s focus on customer mobility solutions, quality of life products, and connectivity have propelled its commercial growth, particularly notable among its sales of motorcycles, household goods, and telecommunication devices.
While the financial outlook remains clouded by the company’s turbulent stock market performance and regulatory challenges, the fundamentals within its operational sectors indicate potential for future recovery, provided the external pressures ease. Included among these efforts is increasing consumer demand for key products which should bolster revenue streams moving forward, positioning Grupo Elektra as one of the principal players within Latin America's market.
Overall, the end of 2024 sees Grupo Elektra at a crossroads defined by both achievements and trials. Its ability to navigate through corporate restructuring, alongside addressing investor concerns and regulatory scrutiny, will be pivotal as it transitions away from public trading to potentially refocus its strategy moving forward.