Alpek Sab De Cv Ord

I'd like to remind everyone that today's webcast is being recorded and will be available on our website at alpec.com. I will now turn the call over to Mr. Pepe Valdez.

Thank you, Alejandro. Good morning, everyone, and thank you for joining us today. This morning, I am very pleased to start by saying that Alpec has kicked off 2022 on an extraordinarily strong note. Subtitles by the Amara.org community Alpex significantly exceeded financial performance expectations for the first quarter. Jose Carlos will review this in greater detail in his presentation. Second, we will discuss the progress related to the octal acquisition. Third, we will cover Alpex recent efforts to improve its governance practices. And finally, we will provide revised 2022 guidance for the earnings report released yesterday. Providing some context for the first quarter result, the global economy remains strong as tightness increase in the marine freight industry due to the Russia-Ukraine conflict resulting in higher costs and lower availability for vessels needed to balance worldwide supply chains. In this environment, Asian integrated polyester reference margins average $420 per ton for the quarter, much higher than expected and only 3% lower than the previous quarter, with the spread between Chinese and Asian margins widening to $98 per ton. North American polypropylene reference margins also experienced a lower than expected quarterly decline, averaging 38 cents per pound, 20% lower quarter on quarter, but only 5 cents per pound lower than the corresponding figure for December. In North America, EPS margin continued to reflect the strength they gained in the fourth quarter of 2021, declining by 7 cents per pound in the first quarter, but remaining at higher than historical levels. At this point, I would like to turn the call over to Jose Carlos, who will go into more detail regarding the impact of these changes on financial results.

Thanks, Pepe, and thank you all for being here with us today. I will first like to highlight some of APEC's main achievements during the first quarter. Our overall volume increased to 1.2 million tons on track with guidance. We achieved record quarterly comparable levy that of $333 million with both the polyester and plastic and chemical segments posting their highest figures ever for any quarter. We gave a dividend to shareholders of $176 million, representing a 6.5% dividend yield at the time of payment. And leverage was further reduced to 1.0 times. If we start by taking a deeper look at volume, Alpec reached 1.22 million tons this period, 4% higher than last quarter, as demand for all of our products remained strong. In the polyester segment, volume was 3% higher quarter-on-quarter, largely due to strong demand and efficient operation across all of our sites, and a lack of weather-related events, which affected us in 2021. In plastic and chemicals, volume was 6% higher quarter-on-quarter. As polypropylene demand remained strong, and Alpek was able to operate idle EPS reactors throughout scheduled maintenance at our US-based facilities. Moving on to raw material price dynamics, average spot print crude oil price increased to $97 per barrel, 23% higher than in the previous quarter, largely due to the effects of the Russia-Ukraine conflict. US reference paraxylene prices increased by 21%. largely in line with the rise in crude oil. And in the plastic and chemicals, propylene prices remain stable, averaging 63 cents per pound, a 4% decrease when compared to the previous quarter. Switching over to EBITDA breakdown for the first quarter, we can see that comparable EBITDA was a record of $333 million and 11% higher quarter on quarter. This was primarily due to better than expected margins for our main products, as well as higher volume across both segments. Reporte de Vida was $456 million, 70% higher quarter on quarter. This result also included a non-cash inventory gain of $63 million and a positive carry forward effect of $66 million. In terms of results by key segment, we can see that polyester comparable EBITDA was $193 million, 21% higher quarter on quarter, and 116 higher year on year, making this the strongest quarter ever for the segment. Results largely benefited from the entry of 2021 contracts, as well as the strong Asian polyester reference margins, which remain higher than expected, averaging $420 per ton. In plastics and chemicals, comparable levita was also set a new quarterly record of $142 million, an increase of 3% quarter-on-quarter and 46% year-on-year. This was mainly due to solid EPS margins stemming from a strong demand coupled with the higher import parity prices due to increased marine freight costs, as well as polypropylene margins, which remain higher than expected for this point of the year. which with regards to free cash flow generation in the quarter, networking capital investment increased by $193 million, largely due to rising raw material prices during the quarter. CAPEX totaled $40 million and was mainly used for maintenance and minor asset replacements. ALPEC paid a $176 million shareholder dividend as approved during this annual shareholders meeting in March. Free cash flow resulted in $120 million as record EBITDA more than offset the increase in networking capital in the quarter. Finally, I want to discuss the company's financial position during the first quarter. Alpex net debt increased to $1.31 billion. Last 12 months EBITDA also increased to $1.28 billion, resulting in an improved leverage ratio of 1.0 times net debt to EBITDA. If considering net debt to comparable EBITDA, we also see that ALPEC also improved this ratio to 1.2 times. That concludes my comments. I will now turn the call back to Pepe. Thank you, Jose Carlos.