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Yahoo
a minute ago
- Yahoo
Trump's Japan Trade Deal Raises Fears He Gave Away Too Much
(Bloomberg) -- US industries and protectionists are raising alarms with President Donald Trump's pact with Japan, saying it risks undercutting his stated goals of rebalancing America's trading relationships and reviving domestic manufacturing. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Milan Corruption Probe Casts Shadow Over Property Boom Trump and his top negotiators on Wednesday hailed the deal as a potential model for other countries hoping to win tariff concessions, citing Tokyo's pledge to create a $550 billion fund for US investments. The president's decision to grant Japan relief on automobiles, however, provoked criticism that the agreement wouldn't address the main source of the US's trade deficit with Japan even as it disadvantages Detroit's Big Three. Around 80% of the US-Japan trade gap is in cars and car parts. Tuesday's announcement marked the latest signal that Trump is willing to negotiate on industry-specific duties on products including chips and pharmaceuticals, potentially undermining the most durable pillar of his tariff strategy. The reaction underscores the risks of the president's transactional negotiating style. Industries that have championed much of Trump's trade strategy and stand to benefit from robust levies on foreign rivals could be left in the lurch as his plans shift. 'Any deal that charges a lower tariff for Japanese imports with virtually no US content than it does North American built vehicles with high US content is a bad deal for the US industry and US auto workers,' said Matt Blunt, president of the American Automotive Policy Council that represents Ford Motor Co., General Motors Co. and Stellantis NV. Trump defended his approach, which resulted in a deal to reduce Japan's country-specific rate to 15% and put US levies on cars and parts at the same level — lower than the 25% global charge on vehicles. 'I WILL ONLY LOWER TARIFFS IF A COUNTRY AGREES TO OPEN ITS MARKET. IF NOT, MUCH HIGHER TARIFFS! Japan's Markets are now OPEN (for first time ever!). USA BUSINESSES WILL BOOM!' Trump posted. His Commerce Secretary, Howard Lutnick, argued in a Bloomberg Television interview on Wednesday that it was also ratcheting up pressure on South Korea and Europe to make additional concessions or risk their automakers being left at a significant disadvantage. And White House Press Secretary Karoline Leavitt said Trump's approach was breaking down barriers for US products abroad. 'Thanks to President Trump, these countries around the world are agreeing to open their markets to American-made products and goods for the first time, which will lead to a boom in sales and profits for American businesses right here at home,' she told reporters Wednesday. Even so, automakers and other industry stakeholders were crying foul Wednesday. They warned that giving Japan an unlimited reduction on auto tariffs undermines the use of those levies not just for cars, but also metals, semiconductors and other goods. 'Unlimited imports at tariff rates below existing Section 232 rates critically undermine the security objections' of the law and in many cases will actually encourage offshoring, said Jon Toomey, executive director of the Coalition for a Prosperous America, an advocacy group representing import-threatened industries that supports tighter trade controls. The provision on Japanese autos is far more expansive than the steel and aluminum tariff reduction Trump gave the UK, which allows a limited quota of imports to enter the US at a reduced rate. Industry-specific tariffs imposed under Section 232 of the Trade Expansion Act are seen as a more lasting tool than Trump's country-based tariffs for boosting the competitiveness of US-made goods, since they rest on stronger legal footing, and some have endured across multiple presidencies. Industry groups also say the product-specific rates provide certainty needed to drive investment in domestic manufacturing plants. Other countries already are clamoring for sectoral tariff relief, and the US-Japan trade deal sends a signal that they are up for negotiation, people familiar with the matter said. Two of those individuals predicted the agreement will also add leverage to the auto and oil industries' pleas for relief from steel duties. 'It doesn't make sense to allow for unlimited vehicle imports at 15%, while charging rates of 25% on auto parts and 50% on steel,' Toomey added. It's also unclear how and when the $550 billion investment fund might come to pass — or if it will prove to be as illusory as investment pledges Trump secured during his first term from China in exchange for scaling down tariffs. Although Beijing promised in 2020 to buy $200 billion in additional US agricultural commodities and other goods, ultimately only 58% of those purchases materialized amid the pandemic, according to the Peterson Institute for International Economics. Trump administration officials cast the Japan deal, as well as frameworks with Indonesia and the Philippines, as incentive for other major partners, including the European Union and South Korea, to bring their best investment and purchasing pledges to the table. 'It spurs other deals along,' White House trade adviser Peter Navarro said in a Bloomberg Television interview. Treasury Secretary Scott Bessent made clear the investment plan helped Japan secure its tariff reduction, telling Bloomberg Television: 'They got the 15% rate because they were willing to provide this innovative financing mechanism.' Lutnick said on the network that under the arrangement Japan will serve as a financier providing equity, loans and other support for manufacturing plants, infrastructure and other projects in the US. Other countries will be under pressure to follow the investment model, said a senior administration official who asked for anonymity because details haven't been formally announced. The investment deals could prove especially attractive to Trump, who frequently extols planned spending in the US announced since his January inauguration. The president and top administration officials also regularly tout the surge in revenue from new tariffs, which have already brought in $113 billion this year, according to the Treasury Department. The US-Japan deal's emphasis on investment suggests the promise of more revenues has taken priority over the push to protect domestic industries, one person familiar with the matter said. While direct foreign investment in the US could help expand domestic manufacturing and artificial intelligence capacity, it won't necessarily make the country's exports more competitive on its own. And some analysts raised doubts about whether Japan's promises to open its markets to US products would prove meaningful. The administration cast Japan's concession to accept cars made to US federal motor vehicle safety standards instead of subjecting them to additional regulatory requirements as a boon for Detroit. Even so, a major impediment to US auto sales in Japan is the American designs themselves — not just trade barriers. Put simply, Japanese consumers are less interested in driving Fords and GMs than Americans are in Toyotas and Hondas. Japan sells the US about 84 cars for every one the US sells there. 'American cars that are big just don't comport well with the needs, desires and demands of the Japanese public' said Colin Grabow, an associate director at the Cato Institute's trade policy center. 'It's unclear what the payoff here is.' --With assistance from Keith Laing, Hadriana Lowenkron, Joe Mathieu, Tyler Kendall and Stephanie Lai. Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Burning Man Is Burning Through Cash A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
2 minutes ago
- Business Wire
Orbia Announces Second Quarter 2025 Financial Results
MEXICO CITY--(BUSINESS WIRE)--Orbia Advance Corporation, S.A.B. de C.V. (BMV: ORBIA*) ('the Company' or 'Orbia') today released unaudited results for the second quarter of 2025. Orbia delivered revenues of $1.97 billion and EBITDA of $300 million for the second quarter of 2025, despite continued challenging market conditions in many parts of the world. However, we are beginning to observe early signs of stabilization and slight improvement in select markets. The Company made meaningful progress on its operational efficiency initiatives and maintained or improved its market position across most business groups. Q2 2025 Financial Highlights (All metrics are compared to Q2 2024 unless otherwise noted) Net revenues of $1,967 million were flat year-over-year, driven by lower revenues in Polymer Solutions and Building & Infrastructure offset by higher revenues in Fluor & Energy Materials, Connectivity Solutions and Precision Agriculture. EBITDA of $300 million decreased 10%, primarily driven by Polymer Solutions and Building & Infrastructure. Operating cash flow of $47 million improved by $43 million. The improvement was mainly due to lower interest expense and a lower cash impact from accruals, partially offset by lower EBITDA. Annual EBITDA guidance, adjusted for non-operating items, reaffirmed between $1,100 million and $1,200 million. 'Orbia's second quarter results reflect resilience amid a persistently challenging global economic landscape. Most of our markets seem to have stabilized at current levels, and in some cases are showing early signs of improvement with pockets of growth emerging in certain areas. We continue to make meaningful progress on the strengthening of our balance sheet through disciplined cost management, unlocking incremental EBITDA from recently completed growth investments, maintaining focused capital allocation, and advancing the divestiture of non-core assets. We also extended all material debt maturities out to 2030 and beyond during the quarter, raising approximately $1.4 billion to refinance existing debt. Looking ahead, we are confident in the compelling growth opportunities across each of our business segments. Our teams remain focused on what we can control— meeting our customers' needs, enhancing financial strength, driving free cash flow, and positioning Orbia for sustainable value creation,' said Sameer Bharadwaj, CEO of Orbia. Q2 2025 Consolidated Financial Information1 (All metrics are compared to Q2 2024 unless otherwise noted) mm US$ Second Quarter Financial Highlights 2025 2024 %Var. Net sales 1,967 1,976 0% Cost of Sales 1,534 1,474 4% Selling, general and administrative expenses 295 329 -10% Operating income 138 173 -20% EBITDA 300 334 -10% EBITDA margin 15.2% 16.9% -166 bps Financial cost 96 35 171% Earnings before taxes 43 139 -69% Income tax expense (benefit) 143 (85) N/A Consolidated net (loss) income (100) 224 N/A Net majority (loss) income (126) 195 N/A Operating cash flow 47 4 N/A Capital expenditures (97) (107) -10% Free cash flow (82) (130) -37% Net debt 4,016 3,838 5% Expand Net revenues of $1,967 million in the second quarter were flat year-over-year. The result in revenues for the quarter was driven by lower prices in Polymer Solutions and lower volumes in certain countries within Building & Infrastructure. These were offset by increases in Fluor & Energy Materials, Connectivity Solutions and Precision Agriculture compared to the prior year quarter. ____________________ 1 Unless noted otherwise, all figures in this release are derived from the Consolidated Financial Statements of the Company as of June 30, 2025 and 2024 and are prepared in accordance with International Accounting Standards 34 'Interim Financial Reporting' of the International Financial Reporting Standards (IFRS), which have been published in the Bolsa Mexicana de Valores (BMV). See Notes and Definitions at the end of this release for further explanation of terms used herein. Expand Cost of goods sold of $1,534 million for the quarter increased 4% compared to the same quarter of the prior year. The increase in cost of goods sold for the quarter was primarily driven by higher raw material costs in Polymer Solutions and Fluor & Energy Materials, partly offset by the benefits from cost savings initiatives and operational efficiencies across all business groups. Selling, general and administrative expenses of $295 million for the quarter decreased 10% compared to the same quarter of last year. As a percentage of sales, SG&A decreased 163 basis points to 15.0%. The decrease in selling, general and administrative expenses for the quarter was primarily due to the benefits from cost savings initiatives. EBITDA of $300 million for the quarter decreased 10%, while EBITDA margin decreased 166 basis points to 15.2%. The decrease in EBITDA and EBITDA margin was due to lower revenues and prices in Polymer Solutions, unfavorable product mix in Building & Infrastructure and generally higher input costs. Financial costs of $96 million for the quarter increased by approximately $60 million year-over-year. The increase in financial costs for the quarter was mainly driven by a shift from an FX gain in the prior year to a slight loss in the current year, primarily driven by the appreciation of the Mexican Peso. An income tax expense of $143 million was recognized for the quarter compared to an income tax benefit of $85 million in the same quarter in the prior year, driven by a shift in the Company's earnings profile between the two periods. The effective tax rate for the quarter was 334%, primarily driven by the earnings mix across tax jurisdictions, the appreciation of the Mexican Peso against the U.S. Dollar, and inflation adjustments in certain countries. Excluding the impact of these discrete factors, the effective tax rate was approximately 124%, which remains elevated due to the relatively low level of pre-tax earnings for the quarter. The effective tax rate for the quarter is not reflective of Orbia's normalized rate which is typically 27% to 32%2. Net loss to majority shareholders of $126 million in the quarter decreased, compared to a net income of $195 million in the same quarter in the prior year. The decrease was driven by higher taxes, higher financial costs and the decrease in operating income. Operating cash flow of $47 million in the quarter improved by $43 million, while free cash flow of negative $82 million improved by $48 million. The improvements were mainly due to lower interest expense and a lower cash impact from incentive compensation payments and accruals, partially offset by lower EBITDA. Net debt of $4,016 million included total debt of $4,875 million, less cash and cash equivalents of $859 million. The Company's net debt-to-EBITDA increased from 3.67x to 3.98x compared to the previous quarter. The increase in the net debt-to-EBITDA ratio during the second quarter was primarily driven by an increase in total debt of $189 million and a decrease in the last 12-months EBITDA of approximately $34 million. Net debt-to-EBITDA at the end of the second quarter using EBITDA adjusted3 for non-operating items to better reflect underlying earnings increased from 3.23x to 3.51x. ____________________ 2 Excluding the impact of inflation and foreign exchange rate changes in Mexico. 3 Adjusted EBITDA is EBITDA adjusted for items that have a limited number of occurrences, are clearly identifiable and not reflective of ongoing business performance. Expand Q2 2025 Revenues by Region (All metrics are compared to Q2 2024 unless otherwise noted) mm US$ Second Quarter Region 2025 2024 % Var. Prev Year % Revenue North America 679 728 -7% 34% Europe 624 582 7% 32% South America 404 387 4% 21% Asia 207 217 -5% 11% Africa and others 53 62 -13% 3% Total 1,967 1,976 0% 100% Expand Q2 2025 Financial Performance by Business Group (All metrics are compared to Q2 2024 unless otherwise noted) Polymer Solutions (Vestolit and Alphagary), 30.4% of Revenues Orbia's Polymer Solutions business group (commercial brands Vestolit and Alphagary) focuses on general purpose and specialty PVC resins (polyvinyl chloride), PVC and zero-halogen specialty compounds with a wide variety of applications in everyday products for everyday life, from pipes and cables to household appliances and medical devices. The business group supplies Orbia's downstream businesses and a global customer base. mm US$ Second Quarter Polymer Solutions 2025 2024 %Var. Total sales* 616 644 -4% Operating income 13 39 -66% EBITDA 79 107 -26% *Intercompany sales were $34 million and $51 million in Q2 25 and Q2 24, respectively. Expand Revenues of $616 million decreased 4%. EBITDA of $79 million decreased 26% and EBITDA margin decreased 374 basis points to 12.8%. The decrease in revenues for the quarter was driven by lower resin pricing and an operational disruption in derivatives, which was addressed by the end of the quarter. Second quarter EBITDA decreased year-over-year, driven primarily by lower revenues, the operational disruption in derivatives and higher input costs. Building & Infrastructure (Wavin), 31.0% of Revenues Orbia's Building & Infrastructure business group (commercial brand Wavin) is redefining today's pipes and fittings industry by creating solutions that last longer and perform better, all with less installation labor required. The business group benefits from supply chain integration with the Polymer Solutions business group, a customer base spanning three continents, and investments in sustainable, resilient technologies for water and indoor climate management. mm US$ Second Quarter Building & Infrastructure 2025 2024 %Var. Total sales 629 665 -5% Operating income 28 42 -33% EBITDA 63 78 -19% Expand Revenues of $629 million decreased 5%. EBITDA of $63 million decreased 19% and EBITDA margin decreased 162 basis points to 10.1%. The decrease in revenues for the quarter was driven by lower volumes in India (as a result of the sale of the tanks business) and Mexico, and an unfavorable product mix, partly offset by strong performance in the U.K. and increased volumes in Indonesia. Second quarter EBITDA decreased year-over-year, driven by unfavorable product mix in Western Europe, and lower revenue in Mexico and India, partially offset by the U.K., Indonesia, Eastern Europe and Brazil and continued benefits from cost saving initiatives. Precision Agriculture (Netafim), 14.2% of Revenues Orbia's Precision Agriculture business group's (commercial brand Netafim) leading-edge irrigation systems, services and digital farming technologies enable stakeholders to achieve significantly higher and better-quality yields while using less water, fertilizer and other inputs. By helping farmers worldwide grow more with less, the business group is contributing to feeding the planet efficiently and sustainably. mm US$ Second Quarter Precision Agriculture 2025 2024 %Var. Total sales 288 284 2% Operating income 12 13 -5% EBITDA 40 39 1% Expand Revenues of $288 million increased 2%. EBITDA of $40 million slightly increased year-over-year and EBITDA margin decreased 14 basis points to 13.8%. The increase in revenues for the quarter was primarily driven by Brazil, U.S. and Peru, partially offset by declines in Mexico and Chile and lower greenhouse projects activity. Second quarter EBITDA increased slightly year-over-year, driven by higher revenues and a favorable product mix. Fluor & Energy Materials, 12.2% of Revenues Orbia's Fluor & Energy Materials business group provides fluorine and downstream products that support modern, efficient living. The business group owns and operates the world's largest fluorspar mine and produces intermediates, refrigerants and propellants used in automotive, infrastructure, semiconductor, health, medicine, climate control, food cold chain, energy storage, computing and telecommunications applications. mm US$ Second Quarter Fluor & Energy Materials 2025 2024 %Var. Total sales 247 230 7% Operating income 55 64 -15% EBITDA 72 81 -11% Expand Revenues of $247 million increased 7%. EBITDA of $72 million decreased 11% and EBITDA margin decreased 606 basis points to 29.2%. The increase in revenues for the quarter was primarily driven by favorable prices in upstream minerals and a favorable product mix. These gains were partially offset by lower upstream minerals volumes and an unfavorable refrigerant gas mix. Second quarter EBITDA decreased year-over-year driven by higher input costs across key raw materials and unfavorable currency fluctuations, partially offset by a favorable product mix and the benefits from cost saving initiatives. Connectivity Solutions (Dura-Line), 12.1% of Revenues Orbia's Connectivity Solutions business group (commercial brand Dura-Line) produces more than 500 million meters of essential and innovative connectivity infrastructure per year to bring a world's worth of information everywhere. The business group produces telecommunications conduit, cable-in-conduit and other HDPE products and solutions that create physical pathways for fiber and other network technologies connecting cities, homes and people. mm US$ Second Quarter Connectivity Solutions 2025 2024 %Var. Total sales 246 236 4% Operating income 26 29 -11% EBITDA 41 41 1% Expand Revenues of $246 million increased 4%. EBITDA of $41 million increased 1% and EBITDA margin decreased 64 basis points to 16.6%. The increase in revenues for the quarter was driven by higher volumes supported by increased demand in North America telecommunications and data center markets as well as a favorable product mix, partially offset by lower prices. Second quarter EBITDA increased year-over-year primarily driven by higher revenues, favorable costs, partially offset by lower prices. Balance Sheet, Liquidity and Capital Allocation Orbia's net debt-to-EBITDA ratio increased from 3.39x to 3.98x year-over-year primarily driven by an increase of $179 million in net debt and a reduction of $124 million in the last 12-months EBITDA. The Company had cash on hand of $859 million at the end of the quarter compared to $797 million during the prior year quarter. The increase in net debt is due to an increase in borrowings of $104 million and the negative impact of the strengthening of the Mexican Peso. Adjusted net debt-to-EBITDA4 for the quarter, was 3.51x as compared to 3.04x at the end of 2024 and 3.23x at the end of the prior quarter. On April 11, 2025, Orbia issued long-term notes (certificados bursátiles) in the Mexican debt market, for approximately $300 million, split evenly between 3 and 10 years notes. The proceeds of the notes were used to refinance its short-term maturities in the local market. On April 30, 2025, Orbia issued senior notes due 2030 and 2035, for approximately $1,100 million. The proceeds of the notes have been used primarily to refinance the previous Senior Notes due in 2026 and 2027. Orbia has redeemed and cancelled its 2026 Senior Notes and a portion of its 2027 Senior Notes. The Company plans to redeem the remaining 2027 Senior Notes on the next eligible redemption date, in accordance with the underlying indenture. Working capital increased by $111 million during the quarter compared to an increase of $56 million in the prior-year quarter. These are seasonal increases that follow the operational trends of the Company's businesses, and which are liquidated in the later part of the year. Capital expenditures of $97 million during the quarter decreased 10% year-over-year, including ongoing maintenance spending and investments to support the Company's targeted growth initiatives. ____________________ 4 Adjusted EBITDA is EBITDA adjusted for items that have a limited number of occurrences, are clearly identifiable and not reflective of ongoing business performance. Expand 2025 Outlook The underlying assumptions for the most recent guidance remain generally unchanged. Therefore, Orbia reaffirms its full-year 2025 Adjusted5 EBITDA guidance in the range of $1,100 million to $1,200 million. The Company also reaffirms its 2025 capital expenditures guidance of approximately $400 million or less, with a continued focus on investments to ensure safety and operational integrity, completing growth projects under execution that are close to revenue and being extremely selective on any new growth investments. Excluding discrete items that do not reflect ongoing operational results such as foreign exchange rate changes and inflation adjustments, as well as other non-recurring items, the Company estimates an effective tax rate of 27% to 32%6 in 2025. Orbia remains committed to managing global tax risks amid a volatile currency and inflation environment and will continue to monitor local tax developments as conditions evolve. For each of Orbia's businesses the Company is assuming the following: Polymer Solutions: Persistent soft market dynamics, driven by excess supply and lower export prices out of China and the U.S. are expected to continue for the remainder of the year. The full year performance is expected to be lower than last year due to the one-off impacts of the raw material supply disruption and operational challenges in derivatives experienced during the first half of the year. With these issues behind, the business expects that second half results will improve compared to first half results. In this environment, Orbia remains focused on realizing the benefits of cost saving initiatives and disciplined cash management. Persistent soft market dynamics, driven by excess supply and lower export prices out of China and the U.S. are expected to continue for the remainder of the year. The full year performance is expected to be lower than last year due to the one-off impacts of the raw material supply disruption and operational challenges in derivatives experienced during the first half of the year. With these issues behind, the business expects that second half results will improve compared to first half results. In this environment, Orbia remains focused on realizing the benefits of cost saving initiatives and disciplined cash management. Building & Infrastructure: The business expects modest growth from new product launches and stabilization across key markets despite continued challenging market conditions in Western Europe and Mexico. The business will continue its focus on realizing operational cost efficiencies to improve profitability. The business expects modest growth from new product launches and stabilization across key markets despite continued challenging market conditions in Western Europe and Mexico. The business will continue its focus on realizing operational cost efficiencies to improve profitability. Precision Agriculture: Market conditions are expected to remain stable to slightly improving, supported by recent positive momentum in Brazil, the U.S. and Turkey. The Company anticipates continued strong performance in parts of Latin America and projects in Africa. The business will remain focused on driving growth through deeper penetration in extensive crops, while maintaining a consistent emphasis on cost management and working capital improvements. Market conditions are expected to remain stable to slightly improving, supported by recent positive momentum in Brazil, the U.S. and Turkey. The Company anticipates continued strong performance in parts of Latin America and projects in Africa. The business will remain focused on driving growth through deeper penetration in extensive crops, while maintaining a consistent emphasis on cost management and working capital improvements. Fluor & Energy Materials: The business anticipates continued strength in fluorine markets, with demand and pricing expected to remain stable or show modest improvement through the remainder of the year, helping offset input cost increases. To support margins, cost-control initiatives will remain a priority, alongside active product portfolio management focused on maximizing value creation. The business anticipates continued strength in fluorine markets, with demand and pricing expected to remain stable or show modest improvement through the remainder of the year, helping offset input cost increases. To support margins, cost-control initiatives will remain a priority, alongside active product portfolio management focused on maximizing value creation. Connectivity Solutions: Volumes are expected to continue growing throughout the year, supported by sustained momentum in network deployment, datacenter demand and investment in the power sector. Profitability growth will be driven by increased demand, along with benefits from cost-saving initiatives and higher utilization of manufacturing facilities, partly offset by a weak pricing environment. ____________________ 5 Adjusted EBITDA is EBITDA adjusted for items that have a limited number of occurrences, are clearly identifiable and not reflective of ongoing business performance. 6 Excluding the impact of inflation and foreign exchange rate changes in Mexico. Expand Conference Call Details Orbia will host a conference call to discuss second quarter 2025 results on June 24, 2025, at 9:00 AM Central Time (CT; Mexico City)/11:00 AM Eastern Time (ET; New York). To access the call, please dial 001-855-817-7630 (Mexico), 1-888-339-0721 (United States) or 1-412-317-5247 (International). Participants may pre-register for the conference call here. The live webcast can be accessed here. A recording of the webcast will be posted several hours after the call is completed on Orbia's website. For all company news, please visit Consolidated Income Statement mm US$ Second Quarter January - June Income Statement 2025 2024 % 2025 2024 % Net sales 1,967 1,976 0% 3,778 3,839 -2% Cost of sales 1,534 1,474 4% 2,951 2,905 2% Gross profit 433 502 -14% 827 934 -11% Selling, general and administrative expenses 295 329 -10% 648 655 -1% Operating income 138 173 -20% 179 279 -36% Financial cost (income) 96 35 171% 172 174 -1% Equity in income of associated entity 1 1 60% 2 2 39% Impairment expense - - N/A - - N/A Income (loss) from continuing operations before income tax 43 139 (0) 9 107 (0) Income tax 143 (85) N/A 138 (70) N/A (Loss) Income from continuing operations (100) 224 N/A (129) 177 N/A Discontinued operations - - N/A - - N/A Consolidated net (loss) income (100) 224 N/A (129) 177 N/A Minority stockholders 26 29 -10% 51 56 -8% Majority Net (loss) income (126) 195 N/A (180) 121 N/A EBITDA 300 334 -10% 498 587 -15% Expand Consolidated Balance Sheet mm US$ Balance sheet Jun 2025 Dec 2024 Jun 2024 Total assets 11,608 11,057 11,214 Current assets 4,057 3,610 3,800 Cash and temporary investments 859 1,009 797 Receivables 1,893 1,448 1,733 Inventories 1,217 1,098 1,186 Others current assets 88 55 84 Non current assets 7,551 7,447 7,414 Property, plant and equipment, net 3,330 3,271 3,316 Right of use fixed assets, net 466 431 476 Intangible assets and goodwill 3,049 3,028 3,069 Long-term assets 706 717 553 Total liabilities 8,646 8,077 8,156 Current liabilities 2,629 2,628 2,515 Current portion of long-term debt 325 548 317 Suppliers 953 821 804 Letters of credit 421 395 387 Short-term leasings 133 111 118 Other current liabilities 797 753 889 Non current liabilities 6,017 5,449 5,641 Long-term debt 4,550 4,078 4,318 Long-term employee benefits 146 130 134 Long-term deferred tax liabilities 378 345 335 Long-term leasings 366 346 376 Other long-term liabilities 577 550 478 Consolidated shareholders' equity 2,962 2,980 3,058 Minority shareholders' equity 533 547 601 Majority shareholders' equity 2,429 2,433 2,457 Total liabilities & shareholders' equity 11,608 11,057 11,214 Expand Cash Flow Statement Second Quarter January - June mm US$ 2025 2024 %Var. 2025 2024 % Var. EBITDA 300 334 -10% 498 587 -15% Taxes paid, net (55) (48) 14% (105) (94) 12% Net interest / bank commissions (73) (92) -21% (143) (156) -8% Change in trade working capital (111) (56) 98% (280) (249) 13% Others (other assets - provisions, Net) (23) (98) -76% 24 (89) N/A CTA and FX 9 (36) N/A 31 (45) N/A Operating cash flow 47 4 997% 25 (46) N/A Capital expenditures (97) (107) -10% (202) (239) -16% Leasing payments (32) (27) 18% (60) (46) 30% Free cash flow (82) (130) -37% (237) (331) -28% FCF conversion (%) -27.4% -39.0% -47.5% -56.4% -100% Dividends to shareholders - (80) -100% - (80) -100% Buy-back shares program - - 1 - Debt 104 26 294% 163 (147) N/A Minority interest payments (36) (32) 13% (63) (59) 8% Mergers & acquisitions 19 (0) N/A 19 (0) N/A Financial instruments and others (6) (37) -83% (33) (42) -22% Net change in cash (1) (253) -100% (150) (659) -77% Initial cash balance 860 1,050 -18% 1,009 1,456 -31% Cash balance 859 797 8% 859 797 8% Expand Notes and Definitions The results contained in this release have been prepared in accordance with International Financial Reporting Standards ('NIIF' or 'IFRS') with U.S. Dollars as the reporting currency. Figures are presented in millions, unless specified otherwise. Figures and percentages have been rounded and may not add up. About Orbia Orbia Advance Corporation, S.A.B. de C.V. (BMV: ORBIA*) is a company driven by a shared purpose: to advance life around the world. Orbia operates in the Polymer Solutions (Vestolit and Alphagary), Building & Infrastructure (Wavin), Precision Agriculture (Netafim), Connectivity Solutions (Dura-Line) and Fluor & Energy Materials sectors. The five Orbia business groups have a collective focus on expanding access to health and well-being, reinventing the future of cities and homes, ensuring food, water and sanitation security, connecting communities to information and enabling the energy transition with basic and advanced materials, specialty products and innovative solutions. Orbia has a global team of over 23,000 employees, commercial activities in more than 100 countries and operations in over 50, with global headquarters in Boston, Mexico City, Amsterdam and Tel Aviv. The company generated $7,506 million in revenue in 2024. To learn more, visit: Prospective Information In addition to historical information, this press release contains "forward-looking" statements that reflect management's expectations for the future. The words 'anticipate,' 'believe,' 'expect,' 'hope,' 'have the intention of,' 'might,' 'plan,' 'should' and similar expressions generally indicate comments on expectations. The forward-looking statements included in this press release are subject to a number of material risks and uncertainties, and our results may be materially different from current expectations due to factors, which include, but are not limited to, global and local changes in politics, economic factors, business, competition, market and regulatory factors, cyclical trends in relevant sectors as well as other factors affecting our operations, markets, products, services and prices that are highlighted under the title 'Risk Factors' in the annual report submitted by Orbia to the Mexican National Banking and Securities Commission (CNBV) and available on our website at Investor Relations | Orbia. The forward-looking statements included herein represent Orbia's views as of the date of this press release. Orbia undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.' Orbia has implemented a Code of Ethics that helps define our obligations to and relationships with our employees, clients, suppliers, and others. Orbia's Code of Ethics is available for consultation at the following link: Additionally, according to the terms contained in the Mexican Securities Exchange Act No 42, the Orbia Audit Committee has established a 'hotline' system permitting any person who is aware of a failure to adhere to applicable operational and accounting records guidelines, internal controls or the Code of Ethics, whether by the Company itself or any of its controlled subsidiaries, to file a complaint (including anonymously). This system is operated by an independent third-party service provider. The system may be accessed via telephone in Mexico, via internet at or via email at ethics@ Orbia's Audit Committee has oversight responsibility for ensuring that all such complaints are appropriately investigated and resolved.
CNET
2 minutes ago
- CNET
Trump's AI Action Plan Is Here. These Are the Top 5 Themes
The Trump administration on Wednesday laid out the steps it plans to take to ensure "global AI dominance" for the US, with an AI Action Plan that calls for cutting regulations to speed up the development of artificial intelligence tools and the infrastructure to power them. Critics said the plan is a handout to tech and fossil fuel companies, slashing rules that could protect consumers, prevent pollution and fight climate change. The plan itself isn't all that binding. It includes dozens of policy recommendations for the executive branch to carry out but doesn't on its own make anything happen. The steps it lays out follow how the Trump administration has approached AI and technology over the past six months -- giving tech companies a largely free hand, focusing on beating China and prioritizing the construction of data centers, factories and fossil fuel power plants over environmental regulations. It is seizing on the moment created by the arrival of ChatGPT less than three years ago and the ensuing wave of generative AI efforts by Google, Meta and others. "An industrial revolution, an information revolution, and a renaissance -- all at once. This is the potential that AI presents," the AI Action Plan says. President Donald Trump is expected to speak on AI priorities later Wednesday during a forum with the hosts of the All-In Podcast. The administration and tech industry groups touted the plan as a framework for US success in a race against China. "President Trump's AI Action Plan presents a blueprint to usher in a new era of US AI dominance," Jason Oxman, president and CEO of the tech industry trade group ITI, said in a statement. Consumer groups said the plan focuses on deregulation and would hurt consumers by reducing the rules that could protect them. "Whether it's promoting the use of federal land for dirty data centers, giving the FTC orders to question past cases, or attempting to revive some version of the soundly defeated AI moratorium by tying federal funds to not having 'onerous regulation' according to the FCC, this is an unwelcome distraction at a critical time for government to get consumer protection right with increasing AI use and abuse," Ben Winters, director of AI and privacy at the Consumer Federation of America, said in a statement. Here's a look at the proposals in the plan. Slashing regulations for AI infrastructure The plan says AI growth will require infrastructure, including chip factories, data centers and more energy generation. And it blames environmental regulations for getting in the way. In response, it proposes exemptions for AI-related construction from certain environmental regulations, including those aimed at protecting clean water and air. It also suggests making federal lands available for data center construction and related power plants. To provide energy for all those data centers, the plan calls for steps to prevent the "premature decommissioning of critical power generation resources." This likely refers to keeping coal-fired power plants and other mostly fossil-fuel-driven infrastructure online for longer. The administration also called to prioritize the connection of new "reliable, dispatchable power sources" to the grid and specifically named nuclear fission and fusion and advanced geothermal generation. Earlier this month, the president signed a bill that would end many tax credits and incentives for renewable energy -- wind and solar -- years earlier than planned. Wind and solar make up the bulk of the new energy generation being added to the US grid right now. Fewer rules around AI technology Congress ended up not including a moratorium on state AI rules in the recently passed tax and spending bill but efforts to cut regulations around AI continue from the executive branch in the action plan. "AI is far too important to smother in bureaucracy at this early stage, whether at the state or Federal level," the plan says. The plan recommends that several federal agencies review whether existing or proposed rules would interfere with the development and deployment of AI. The feds would consider whether states' regulatory climate is favorable for AI when deciding to award funding. Federal Trade Commission investigations and orders would be reviewed to determine that they don't "advance theories of liability that unduly burden AI innovation." Those rule changes could undermine efforts to protect consumers from problems caused by AI, critics said. "Companies -- including AI companies -- have a legal obligation to protect their products from being used for harm," Justin Brookman, director of tech policy at Consumer Reports, said in a statement. "When a company makes design choices that increase the risk their product will be used for harm, or when the risks are particularly serious, companies should bear legal responsibility." Ideology and large language models The plan proposes some steps around ensuring AI "protects free speech and American values," further steps in the Trump administration's efforts to roll back federal policies around what it refers to as "diversity, equity and inclusion," along with references to the problems of misinformation and climate change. It calls for eliminating references to those items in the National Institute of Standards and Technology's AI Risk Management Framework. Federal agencies would only be allowed to contract with AI developers who "ensure that their systems are objective and free from top-down ideological bias." The Trump administration has recently announced contracts of up to $200 million each to developers Anthropic, Google, OpenAI and xAI. Grok, the model from Elon Musk's xAI, has recently come under fire for spouting antisemitism and hate speech. Dealing with workforce challenges The plan acknowledges that AI will "transform how work gets done across all industries and occupations, demanding a serious workforce response to help workers navigate that transition" and recommends actions by federal agencies including the Department of Labor intended to mitigate the harms of AI-driven job displacement. The plan calls for the Bureau of Labor Statistics, Census Bureau and Bureau of Economic Analysis to monitor how AI affects the labor market using data already collected. An AI Workforce Research Hub under the Department of Labor would lead monitoring and issue policy recommendations. Most of the actual plans to help workers displaced by AI involve retraining those workers for other jobs or to help states do the same. Other jobs-related recommendations are aimed at boosting the kinds of jobs needed for all those data centers and chip manufacturing plants -- like electricians and HVAC technicians. These plans and others to encourage AI literacy and AI use in education drew praise from the Software & Information Industry Association, a tech industry trade group. "These are key components for building trust and ensuring all communities can participate in and benefit from AI's potential," Paul Lekas, SIIA's senior vice president of global public policy, said in a statement. More AI in government The plan envisions more use of AI by the federal government. A talent exchange program would allow employees with experience or talent in AI to be detailed to other agencies in need. The General Services Administration would create a toolbox of AI models that would help agencies see models to choose from and use cases in other parts of the government. Every government agency would also be required to ensure employees who could use AI in their jobs have access to and training for AI tools. Many recommendations focus specifically on the Department of Defense, including creating a virtual proving ground for AI and autonomous systems. AI companies have already been signing contracts with the DOD to develop AI tools for the military.
