After increasing its net sales in 2022, Mexico‘s Orbia started 2023 on a positive note across all of its businesses.
Its net sales were US$9.6 billion in 2022 and increased 10% year-on-year, with higher sales in Connectivity Solutions, Fluorinated Solutions and Polymer Solutions, especially during the first half of the year, partially offset by lower sales in Precision Agriculture.
Orbia has business activities in more than 110 countries and operations in more than 50, with headquarters in Mexico City, Boston, Amsterdam and Tel Aviv.
Financial results of Orbia
Overall, broad market uncertainty, the effects of the currency environment, exchange rate volatility, inflationary challenges and the Russia–Ukraine conflict continued to affect the global environment, making short-term projections difficult.
But according to the company itself, taking the above into account and assuming the absence of unexpected material disruptions, Orbia is a resilient company.
Going forward, the company anticipates stable to slightly falling mid-single-digit net sales in 2023, as well as EBITDA of $1.65 billion or higher this year.
Orbia also expects capital expenditures in the range of $600 million to $700 million by 2023, which includes $300 million to $350 million related to maintenance spending, as well as $300 million to $350 million related to growth investments, which will depend on the economic environment.
Orbia
For each of its business groups, the company is assuming the following:
Polymer Solutions
The company expects the PVC market to improve through 2023 as China reopens operations and the construction market stabilizes globally.
In this regard, Orbia has seen general PVC resin prices come back from a floor at the beginning of 2023 and ultimately the PVC market is expected to settle in the long term above the levels seen before the pandemic.
The company continues to believe that the supply/demand balance in the industry will remain tight over the long term.
Building and Infrastructure
Orbia forecasts inflationary cost pressures in the first half of the year, with an improvement towards the second half.
Although energy costs in key European countries have come down to pre-war levels, uncertainty prevails.
The business will continue to manage margins and focus on driving a better sales mix toward higher-value products.
Precision Agriculture
The company projects demand for precision irrigation products to strengthen throughout the year, supported by continued investment in technologies that address water scarcity around the world.
Connectivity Solutions
Orbia expects continued growth throughout the year, supported by favorable market conditions and investments in incremental capacity.
Fluorinated Solutions
The company sees revenue and profitability improvements across the product portfolio in line with the strengthening market and new regulations, partially offset by incremental costs related to investment in long-term strategic growth initiatives.
