...April 28, 2025 This report does not constitute a rating action. Alpek S.A.B. de C.V. executed most of its operating cash optimization plans and strengthened its profitability margins amid still pressured industry prices. EBITDA margins for Alpek reached 8.5% in 2024 and 8.3% in the last 12 months as of March 31, 2025 (versus 6.9% in 2023), thanks to installed capacity rationalization, organizational restructuring, energy contract renegotiations, and other cost efficiencies. Foreign exchange (FX) rates played a key factor on Mexican peso-denominated slightly weaker-than-expected metrics. The Mexican peso (MXN) depreciated about 17% to MXN20.5 per $1 by the end of 2024 (versus MXN17.5 per $1 in 2023) leading to debt to EBITDA ratio of 3.3x in 2024 (versus 2.9x in U.S. dollar calculations) because its full capital structure is denominated in U.S. dollars. Our base-case scenario assumes Alpek to deleverage at 2.7x within the next 18 months, as per its financial policy. In our opinion, Alpek...
