Orbia's outlook: cautious due to economy

Orbia‘s outlook is cautious, after posting a 15 percent year-on-year drop in net sales in the first half of 2023, to US$4.457 billion.

At the same time, its net income was US$112 million, a plunge of 81 percent.

Orbia operates in the Polymer Solutions (Vestolit and Alphagary), Building and Infrastructure (Wavin), Precision Agriculture (Netafim), Connectivity Solutions (Dura-Line) and Fluorinated Solutions (Koura) sectors.

During the second quarter of 2023, several of Orbia’s end markets, particularly in the building and construction sector, experienced lower demand and weaker pricing.

In its own words: the company remains cautious about the level of economic activity heading into the second half of the year in certain regions due to the effects of monetary policy pressure, exchange rate volatility, inflationary challenges and the war in Ukraine.

Given the decline in absolute polymer price levels and market weakness, Orbia expects its sales to be lower than the prior year by mid-single-digit to high-single-digit percentages.

Orbia continues to work to mitigate the impacts of these factors on its results through fiscal discipline, commercial and operational excellence and optimization efforts, and is targeting EBITDA of approximately $1.65 billion in 2023.

Orbia’s Outlook

In addition, the company is managing its capital expenditures in line with current market conditions, and now expects CAPEX guidance to be in the range of US$550 million to US$650 million by 2023, which includes maintenance spending and growth investments.

Finally, as part of Orbia’s outlook, the company is revising its effective tax rate guidance for the year to between 44% and 47% due to the continued appreciation of the Mexican peso.

Orbia’s five business groups have a collective focus on expanding access to health and wellness, reinventing the future of cities and homes, ensuring food and water security, connecting communities with information, and accelerating a circular economy with basic and advanced materials, specialty products and innovative solutions.

Orbia has business activities in more than 110 countries and operations in more than 50.