Okay. Thank you very much, ladies and gentlemen. Thank you for standing by, and I would like to welcome you to Alicorp's second quarter 2024 results call on the 26th of July. At this time, all participants' lines are on listen-only mode. The format of the call today will be a presentation by the management team, followed by a question-and-answer session. So, without further ado, I would like to pass the line to Mr. Misael Alvarez. Please go ahead, sir.
Thank you, and good morning, everyone. Welcome, and thanks for joining us today. Speaking to you is Misael Alvarez, Director of Strategy, Portfolio, and Investor Relations. As presenters today, we will have Mr. Álvaro Correa, Chief Executive Officer, Mr. Manuel Romero.
Hello? Okay. I'll take the part. Álvaro Correa, Chief Executive Officer; Mr. Manuel Romero, Chief Financial Officer; and other members of the senior management team who will join us during the Q&A session. Today, we will be discussing the second quarter 2024 results after the financial results and earnings report were issued on Thursday. If you have not received a copy of the earnings report, please visit us at www.alicorp.com.pe, where you will also find a webcast presentation to accompany our discussion during this call. Please be advised that today's call is for investors and analysts only. Therefore, questions from the media will not be taken. If you are a member of the media and wish to direct any question to the company, please contact our team directly after the call. Before we begin, I would like to remind you that forward-looking statements may be made during this conference call.
These forward-looking statements are based on several assumptions and factors that could change, causing actual results to materially differ from current expectations. We ask that you refer to the disclaimer located in the earnings release prior to making any investment decision. It is now my pleasure to turn the call over to Mr. Álvaro Correa, Chief Executive Officer of Alicorp. Álvaro, please go ahead.
Thank you, César. Good morning, everyone. Thank you for joining the call today. I will start today with an update on the agreement for the sale of our Crushing business unit. We will discuss both our consolidated and business units' financial results. We will go through our leverage indicators. At the end, before the Q&A section, I will take the floor again for an update on our guidance for 2024. Let's go, please, to slide number 5 for an update on the sale process for our Crushing operation in Bolivia. Last May, we announced that we had received certain expressions of interest for our Crushing business, headquartered in Bolivia. After a rigorous analysis, we have come to an agreement that defines the conditions for its sale with Asai Capital Holdings, a company whose investors have a relevant presence across different sectors in Bolivia.
The strategic rationale for the acquisition of the Crushing business through ADM Bolivia and Industrias de Aceite back in 2018 initially addressed the need to be vertically integrated given the Bolivian market dynamics, in addition to the opportunity to create a winning play through the B2B and B2C markets, leveraging the competitive advantages already developed in Peru. Even though this non-core business allowed Alicorp to get a much deeper understanding of the dynamics around a very critical raw material such as soybean oil, it has also represented a significant challenge for our company, given the volatility it generates to our business due to its commodity nature, the high levels of working capital requirements, and the low predictability, which resulted in relevant deviations on our EBITDA forecasts.
We believe that the sale of our Crushing business is fully aligned with our new strategy, allowing us to focus on our core business, where we have relevant competitive advantages. Additionally, we expect this operation to improve our credit profile as we reduce volatility in our results and leverage position. This transaction is still subject to the completion of several operational milestones and formalities, including the spinoff of our consumer business in Bolivia. We estimate the transaction to be completed within the next 1-3 months, and we will continue to provide updates as it evolves. Let's review now our consolidated adjusted gross profit on slide number 7, please. Before going through our financial results, we would like to advise that the following figures are being presented on a pro forma basis. These adjusted figures exclude non-recurring impacts incurred during the respective period.
As mentioned in previous calls, given that foreign exchange arbitrage opportunities in Bolivia are becoming recurrent and relevant, we are presenting Crushing foreign exchange effects as part of the Crushing margin and therefore as part of our gross profit. Excluding the Crushing business, adjusted gross profit amounted to PEN 693 million, and gross profit per metric ton reached PEN 1,371, increasing 15% and 23% year-over-year, respectively, despite lower volume sold. Our consolidated adjusted gross profit amounted to PEN 803 million, increasing 20% year-over-year. This was explained by the very positive results on our Consumer Goods Peru, Consumer Goods International, and B2B units, which increased PEN 98 million, PEN 34 million, and PEN 18 million, respectively, in the second quarter of this year. This was partially offset by Aquafeed, which showed a PEN 60 million decrease year-over-year. Let's move to slide number 8, please.
Consolidated adjusted EBITDA reached PEN 466 million, a 28% year-over-year increase, explained by the performance of both Peru and international consumer goods as we continue to focus on core brands and prioritize key categories across our main geographies. B2B also continues to deliver strong results. This was partially offset by a PEN 55 million decrease in our Aquafeed business, which is still facing challenges due to a lower-than-expected recovery, particularly on our shrimp business. Excluding the Crushing business, adjusted EBITDA amounted to PEN 377 million, and adjusted EBITDA per metric ton reached 746 PEN, increasing 19% and 26% year-over-year, respectively. With these results, we are delivering a fourth consecutive quarter with very positive growth rates in terms of adjusted EBITDA and adjusted gross profit, excluding Crushing.
Now, let me pass the floor over to Manuel, who will discuss in greater detail the operating results for our business units as well as our liquidity and debt metrics. Please, Manuel.
Thank you. Thank you, Álvaro.
Thank you, Álvaro.
Let's move on to slide 10 to discuss the performance of our Consumer Goods Peru units. As we have discussed in previous calls, we are now focusing on driving growth spearheaded by our emblematic brands and leveraging distribution channels where we have competitive advantages, ensuring that the volumes we sell add substantial value to our company. Our new strategy has proven successful in the last quarters as we recovered market share on a year-to-date basis in 2024 compared to 2023. For example, we have seen increases in four key brands such as Primor by 1.2 percentage points in edible oils, Casino by 0.6 percentage points in cookies and crackers, Alacena by 2.6 percentage points in culinary sauces, and Bolívar by 0.5 percentage points in laundry soap.
Additionally, our volume mix has improved as the portion of core products sold increased 2 percentage points from 74% in the second quarter of 2023 to 76% in the second quarter of 2024 of total sales. It is important to mention that despite the 1.9% year-over-year decrease in volume sold in this quarter, our strategy continues to consolidate, consciously letting go of unprofitable volume and capturing higher value volume with a special focus on the traditional channel, which accounts for 78% of total sales, 2 percentage points higher than the second quarter of 2023. In addition, on a quarter-on-quarter basis, we observed a 2.3% increase in volume compared to the first quarter of 2024, led by the growth of our emblematic brands. The implementation of our strategy has resulted in a quarter with an outstanding financial performance.
In this quarter, EBITDA reached PEN 208 million, a 37% year-over-year increase, despite higher SG&A expenses. This growth is mainly explained by a 36% increase in gross profit, driven by better product and channel mix and lower pressure from raw material costs. With a robust and valuable volumetric foundation now in place, we are now confident in sustaining this momentum and initiating total portfolio volumetric growth in the upcoming quarters by leveraging on the strength of our brands and our competitive advantages. Moving on to B2B, we remain optimistic for 2024 as we continue to deliver solid results and growth, mainly explained by a slight recovery of B2B markets and an increase in out-of-home consumption, although it is still below pre-pandemic levels. In this context, we managed to deliver an increase in volume sold for the fourth consecutive quarter, reaching 160,000 metric tons, a 7% year-over-year increase.
We remain focused on sustaining healthy profitability levels, increasing our gross margin 4.6 percentage points in this quarter, mainly explained by lower cost pressure due to lower commodity prices. As a result, gross profit reached PEN 139 million and gross profit per metric ton of PEN 869, which represents strong year-over-year increases of 15% and 7%, respectively, despite lower revenue and a more challenging environment. EBITDA in this quarter reached PEN 87 million, a year-over-year increase of 15% when compared to last year. Regarding the performance of Consumer Goods International, EBITDA registered another positive performance in this quarter, reaching PEN 36 million, a year-over-year increase of PEN 45 million. This result is mainly explained by Bolivia, which achieved an increase of PEN 38 million due to a better performance in edible oils, detergents, and shortenings, where we have gained market share.
These results are mainly explained by our focus on prioritized categories and lower cost pressure from raw materials. In Ecuador, we delivered a positive performance in this quarter, reaching PEN 2 million in EBITDA, the first positive result since the third quarter of 2022, driven mainly by improvements on gross profit in prioritized categories, resulting in a year-over-year increase of PEN 6 million as we continue executing our marketing and distribution efforts to consolidate our go-to-market strategy in that country. Other geographies also exhibited an important PEN 3 million recovery in EBITDA versus the second quarter of last year as we continue focusing on profitable categories and markets.
Also, as we mentioned on our last call, we have entered the American market with our brand Tari in the hot sauces category, so far achieving encouraging results as we are now codified in 1,000 points of sale with positive early results showing turnover on shelves above the segment average. Let's move on to the performance of Aquafeed and Crushing on slide 11. Both the global shrimp and salmon industries continue to face a challenging market outlook, and climate issues are impacting production levels and, therefore, farmers' financial performance. In the first half of the year, Ecuadorian shrimp and Chilean salmon exports have experienced reductions compared to previous years, and in this context, farmers keep looking for better commercial terms. Unfortunately, the shrimp industry recovery is taking longer than we anticipated last year. In terms of business performance, EBITDA in the second quarter decreased 53% year-over-year.
This was mainly explained by a 41% decrease in gross profit due to lower volume sold in both of our feed business units and price reductions due to the aggressive competitive dynamic. In this complex market dynamic, in Ecuador, we remain focused on improving our feed market share in key clients. This is helping us gradually improve our financial results versus last quarter and expect this gradual recovery to continue in the upcoming quarters. We remain confident that Ecuador has relevant competitive advantages versus other shrimp-producing countries, but given that global shrimp prices remain at historical lows, it will take some time for the industry to fully recover. Moving on to Crushing, despite a delayed and smaller harvest of soybean crops, which impacted in lower soybean crush during the quarter, we managed to achieve an increase of 63% in our gross profit, mainly explained by exchange rate arbitrage gains.
During the second quarter, we registered $24 million in EBITDA, an increase of $11 million when compared to the second quarter of 2023. Moving on to slide 13 to comment on our leverage, debt, and liquidity metrics. Regarding our debt metrics, we continue to generate positive free cash flow driven by the increase in profitability in our core business units. As a result, in the second quarter, we posted a significant decrease in our leverage, reaching a 2.6x net debt to adjusted EBITDA ratio, more than one turn lower compared to the same period of 2023, despite the peak of our working capital requirements in the Crushing business and the execution of our PEN 515 million share buyback program.
In the following months, leverage should continue improving, supported by EBITDA and cash flow generation in our core business units, driven by the implementation of our strategy and supported by working capital initiatives across all our business units. However, as a result of the potential acquisition of Refinería del Espino and a prospective additional share buyback program over the upcoming months, we might see slight increases in our leverage ratio that should be partially offset by the divestiture of our Crushing operation. In every scenario, we expect to close the year with healthy debt levels thanks to our robust EBITDA recovery. Regarding our liquidity, as of June, our available cash position amounted to PEN 1.027 billion, PEN 491 million less than as of March 2024, mainly explained by our share buyback program previously commented.
This cash position covers 0.8x our debt maturities over the next 12 months, and if we consider our committed facilities, that ratio becomes 1.1x . Now, let me pass the floor over to Álvaro to wrap up today's presentation with a glimpse of what we expect for our full year 2024 results on slide 15.
Thank you, Manuel. The redesign and implementation of our new strategy has allowed us to deliver very positive results and a strong recovery during the last four quarters, setting the growth path for our company. This positive trend, despite Aquafeed headwinds, leaves us optimistic for the rest of 2024. Thus, we're partially updating our guidance. Regarding revenue, we continue to expect a low single-digit decrease as we continue focusing on generating value mainly through core volume in key categories.
This has allowed us to significantly improve our profitability levels despite lower volume sold, especially from our value portfolio. Moreover, the downward trend in raw material costs also allowed us to make pricing decisions to maintain our competitiveness in the market, negatively impacting revenues but with no impact on profitability. Given that the shift in strategy started in May 2023, it is likely that a base effect will lead to deliver more conservative growth rates in the second half of the year for gross profit and EBITDA. However, given that year-to-date results exceeded our initial expectations, mainly in our consumer goods and B2B businesses, we now expect a consolidated EBITDA growth between 21% and 26% for the full year 2024 and between 18% and 22%, excluding the Crushing business.
As for our investments in 2024, we continue to expect $76 million in CapEx and $62 million excluding Aquafeed. Finally, and although we are expecting higher EBITDA growth, we remain cautious regarding debt levels by year-end and maintaining the range between 1.9x- 2.4x net debt to adjusted EBITDA, which will allow us to maintain a healthy leverage position and remain below the 3.0x threshold. It is worth mentioning that the low end of this range does not consider the potential acquisition of Refinería del Espino or additional distributions to our shareholders, while the high end of the range includes both events. Here, I would like to stop and open the session to any questions you may have.
Thank you very much for the presentation. We will now be moving to the Q&A part of the call. If you have a question, please press star two. That's star two for any questions. If you are dialed in via the web, you may also ask a voice or a text question. Thank you very much. Our first question comes from Mr. Alonso Aramburú from BTG Pactual. Your line is open. Please go ahead, sir.
Yes. Hi. Good morning, and thank you for the call. Can you please comment on the timing for Refinería del Espino? What's the latest as to when do you expect this to close? And also, regarding your Aquafeed business, if you can give us some more color as to some of the trends, if you're seeing some improvement in terms of volumes and sales in recent weeks? Thank you.
Manuel, you take this one, please.
Sure. Thanks, Alonso, for your question. Regarding Refinería del Espino, we're expecting to close that transaction in the next quarter. We're moving along well with our due diligence, and assuming that the independent committee feels comfortable with that transaction, we should be able to close next quarter. Regarding Vitapro, as I mentioned in the call, shrimp prices remain at historic lows. What we're starting to see is that our new plant that required significant investments in the last two years is coming in line. We're starting to improve the production profile of our feed, and that is helping us regain market share in key clients. So despite a reduction in harvested volumes, we're gaining share in relevant clients, and that is allowing us to mitigate some of the reductions in volumes that the industry is experiencing right now.
We are expecting recovery in our financial performance to continue in the upcoming quarters, but it's not happening as fast as we expected last year or in last quarter, especially because in the U.S., they implemented an additional tax for shrimp production in Ecuador that is adding some complexity in the shrimp industry, right? But we remain confident that the recovery will take place, but we just need to have a little bit more patience.
Thank you.
Okay. Thank you very much. Just once again, star two for any additional questions. In the meantime, I'll take a couple of text questions. The first one is, when do you expect to close the sale of the milling business?
I can take that one. First is the Crushing business, not the milling business, the Crushing, the soybean oil Crushing. And we have, as we announced last week, we have reached an agreement, but we have to go through several steps, operational milestones, etc., and this should, as I said, be completed within the next 1-3 months. It's going to take a while, but we're in the process.
Okay. The second one is related to this in monetary terms. How much do you expect the transaction of the crushing business to improve the company's results?
Remember that we paid, I have the figure here, $156 million for that business a few years ago, and what we expect today is something above that level. We will share that information later on when we finally close the deal through the process that I just explained. That's going to be a great deal above the level we paid.
Okay. Thank you very much. We have a follow-up text question. Would the sale of Molienda cover the acquisition of the Espino refineries? If so, do you have any percentage?
Would the sale of Molienda cover the acquisition of Refinería del Espino?
Can you take this one, Manuel, please?
Sure. I mean, we haven't disclosed the terms of either transaction, but they're in a similar range. So that's why when we discussed our liquidity metrics, the impact on leverage of the transactions compensates each other. So I mean, even though we haven't disclosed the exact terms, they're similar in magnitude.
Okay. Thank you very much. Just once again, star two for any additional questions. That's star two. We'll give another minute or so for any additional questions to come through. Okay. It looks like we have a follow-up question from Mr. Alonso from BTG Pactual. Your line is open, sir. Please go ahead.
Yes. Hi. Thank you. Yeah. So I just wanted to follow up on the guidance on sales, down low single digits for the year. I think that should imply that you would be growing sales in the second half of the year. Is that your sense that you can start growing sales? Thank you.
Manuel. Manuel, can you explain that, please?
Sure. Yes. That is correct, Alonso. If you look at the results in 2023, by mid-2023, we implemented our new strategy, and that led to reductions in volume. I mean, when we compare to the base of 2023, in 2024, we should start seeing some growth because we're starting to see a recovery in our emblematic brands in the traditional channels. We are expecting some volume growth when compared to 2023 when we implemented our new strategy. In terms of consumer goods, we should see volume recovery. In B2B, we expect that volume to continue a positive trend that we described in this call. In Aquafeed, if you look at 2023, the second half of 2023 was when this shrimp crisis started. With the entry of our new production line, we are expecting some volume growth in Aquafeed as well.
I think that explains why we were expecting the slight volume increase in the second half of 2024.
Okay. Thank you, Manuel.
Okay. Thank you very much. We have a few more text questions. The next text question is, I would like to know if you would consider distributing dividends instead of executing another share repurchase program this year, considering the low liquidity and the float of the stock we'd have after this repurchase.
Manuel? Okay. You take this one.
Yeah. I can take it. I mean, we're flexible on how to distribute cash to shareholders. The shareholder meeting that will take place on August 7 will. The purchases of shares have not been made, and that is a decision that will need to be made by the board and the executive committee of Alicorp. So we're basically just looking to have the option available to us. And as we continue progressing in the year and assuming that the results continue in this positive trend, we will decide if it's better to distribute a cash dividend or continue repurchasing shares. As we have mentioned before, we strongly believe that current share price does not reflect the intrinsic value of Alicorp. So we believe repurchasing shares could be accretive to shareholders, but again, that's something that we will evaluate later on.
Okay. Thank you very much. Next text question. Can you please share with us your strategy for CG Peru beyond 2024 in terms of which product categories you see growth and drivers of margins and new categories? Thank you.
We're always exploring not only growth through innovation in the current categories, but also we always have in the pipeline a few initiatives regarding other categories. We don't want to share that information yet. That's one area of growth. The other one is always look at the expansion in other places, in other geographies. Even though that's part of Alicorp's strategy, it should be taken very carefully in order to create value. So yes, there are a few areas of growth that we're considering today.
Okay. Thank you very much. The next question is about the NFD to EBITDA ratio. You mentioned that the 1.9x NFD EBITDA ratio expected by year-end doesn't include the impact of the acquisition of Refinería del Espino. Do you mean that the 2x-4x includes such an effect? Is it the impact related to the likely upcoming share buyback program considered in those figures? Thank you.
Yeah. Yes. That's correct. The range precisely differentiates both scenarios, right? Both the purchase of Refinería del Espino and potential buybacks or other measures are included in the 2.4x level that we mentioned. And the 1.9 is without those events.
Okay. The next question is about EBITDA margin. The Consumer Goods Peru EBITDA margin is around 22%. Will this level be the new normal for the business?
Manuel, can you take that one, please?
Sure. I mean, as we have mentioned in previous calls, the percentage margin can be affected by changes in raw material prices. So it's very hard to predict percentage points moving forward because if the soy prices increase significantly as they did in 2021 and 2022, that will have an impact on percentage margins. But assuming that commodity price levels remain at current levels, we expect our business to maintain those percentage points or perhaps increase slightly as we continue executing our strategy. So I would expect something between 22% and 25%, but again, that will depend on commodity prices. If you look at the per-metric figures, we believe that we will be able to sustain those levels regardless of commodity price movements, again, with slight increases as we continue the execution of our strategy.
Okay. Thank you very much. We'll give another few seconds for any additional questions to come in. Okay. Thank you very much. It looks like we have no further questions. I'll pass the line back to the management and IR team for the concluding remarks.
Okay. Thank you. Thank you, everyone. I would like to close this call expressing once again that we are truly confident that our current strategy makes us stronger and more resilient, that our competitive advantages and the strength of our brands place us in a strategic position as market leaders in several categories, and that the improvements in profitability and cash flow generation will continue to create greater value for our share and stakeholders in the upcoming years, as well as to provide the strength to grow through continuous innovation in current and new categories and through opportunities that may arise in the geographies we operate. Thank you once again for your time and continued support. In case you have any further questions, please do not hesitate to contact us. Have a great day.
Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and goodbye.