Arca Continental (AC) reported record results in the fourth quarter of last year, surpassing market expectations. AC's revenues amounted to 64,947 million pesos, representing a 29.9% increase compared to the same period of the previous year. Additionally, operating cash flow reached 14,181 million pesos, a 41.7% increase compared to the fourth quarter of 2023.
According to Richard Horbach, an analyst at Intercam Banco, consolidated revenues increased by 29.9% and consolidated EBITDA grew by 41.7%, reaching a margin of 21.8%, the highest in history for a fourth quarter. These positive results are attributed to pricing strategies and favorable exchange rate effects, according to Horbach.
The director of analysis and strategy at Vector, Marco Antonio Montañez, mentioned that AC's results exceeded estimates in revenues, operating profit, cash flow, and net profit. Ariel Méndez, an analyst at Grupo Financiero Ve Por Más, emphasized that the fourth quarter was positive, with double-digit increases in key indicators, driven by recovery in volume, price hikes, and favorable exchange rate effects.
For the current year, Arca Continental expects a high single-digit increase in its sales, maintaining the price increase policy at least in line with inflation and with investments representing between six and seven percent of its total sales. The company aims to achieve compound annual growth rates of 6 to 8% in revenues and 8 to 10% in EBITDA over the next five years.
With a diversified product portfolio, a solid balance sheet, and a healthy level of leverage, AC is well-positioned for continued growth. It is expected that in the coming quarters, exchange rate effects will continue to benefit the company's results. In this context, buying the stock is recommended with a target price of 225.50 pesos per share towards the end of the year, according to Horbach.
