Expense control offsets pressure on gross margin
The water-solutions company released its unaudited results, prepared under International Financial Reporting Standards, on October 21. Its quarterly EBITDA margin reached 13.2%, an improvement of 250 basis points from a year earlier.
Higher resin costs weighed on gross margin, which slipped 60 basis points to 41.2%. But operating expenses increased only 2.6%, reducing their share of sales to 34.7% from 37.0%. Rotoplas said that reduction more than compensated for the weaker gross margin.
Operating income increased 50.7% to 192 million pesos. A smaller financing expense also helped narrow the net loss: net financing cost declined to 164 million pesos from 354 million pesos, mainly because of lower foreign-exchange effects in Argentina.
For the first nine months, sales totaled 8.631 billion pesos, up 4.6%, and EBITDA rose 18.1% to 1.126 billion pesos, with a 13.1% margin. The nine-month net loss narrowed to 91 million pesos from 133 million pesos in the corresponding 2025 period. CEO Carlos Rojas Aboumrad attributed the improved performance to disciplined execution despite resin-cost pressure and weak demand in some markets.
Bebbia helps services return to positive EBITDA
Quarterly product sales grew 9.5%, while services revenue increased 10.3%, supported primarily by the bebbia water-purification subscription business. Services generated EBITDA of 4 million pesos, reversing a loss of 63 million pesos a year earlier. Rotoplas credited the turnaround mainly to better unit economics at bebbia.
Bebbia ended the quarter with more than 208,000 active subscribers. It added over 14,000 net active subscribers during the period, its largest quarterly addition to date.
A separate October 20 report by El Fondo put bebbia's reach in Mexico at more than 1 million users, representing over 200,000 subscribers in 150 municipalities. The user and subscriber figures describe different measures of the service's reach.
In that report, bebbia CEO Guillermo Aguado described a service combining reverse-osmosis purification and maintenance in a single payment. The company also launched its "La Prueba bebbia" campaign with Cofepris-certified equipment that retains 99.99% of bacteria.
Growth across regions, with different demand conditions
Mexico's sales increased 4.8%, and its EBITDA margin improved by 250 basis points to 17.8%. Rotoplas said vertical tanks, rainwater harvesting systems and its services platform supported growth despite a weak market. It cited low consumer confidence, slower vertical construction and heavy rains as constraints.
Pricing was the main driver in Argentina, where quarterly revenue increased 6.8% in Mexican pesos and 24% in local currency. Storage and flow volumes declined as construction activity remained weak. The business reached EBITDA break-even, compared with a loss a year earlier, although its nine-month sales were still down 6.3%.
The United States recorded quarterly sales growth of 20.9% in Mexican pesos and approximately 31% in US dollars. For the first nine months, the corresponding increases were 4.9% and approximately 18%. The US business also recorded its sixth straight quarter of positive EBITDA.
Sales in the Other Countries category rose 25.1% during the quarter. That category and the United States together accounted for 27% of group sales, up from 24% a year earlier.
Lower debt and capital spending
Rotoplas ended the quarter with net financial debt of 3.289 billion pesos, down 13.2%, and cash of 1.074 billion pesos. Net debt to EBITDA declined to 2.2 times from 3.2 times a year earlier. The company attributed the improvement to stronger EBITDA, more cash and lower debt, and said reducing leverage remained a priority.
Operating cash flow increased 16.8% over the first nine months. Capital expenditures fell 10.3% to 317 million pesos, equivalent to 3.7% of sales, with spending focused on Mexico, particularly services.
The release also disclosed the market values of two derivative positions as of September 30: 28.36 million pesos for an interest-rate swap and 0.34 million pesos for an MXN/USD exchange-rate forward.
Analyst targets and corporate recognition
In its earnings release, Rotoplas listed three analysts' ratings and price targets, all in Mexican pesos. BTG Pactual's Gordon Lee had a Neutral rating and a 15.30-peso target; GBM's Regina Carrillo had an Outperform rating and a 39.00-peso target; and Punto Research's Pablo Quiroz had a Hold rating and a 14.40-peso target. The listed consensus target was 22.90 pesos.
Rotoplas also reported that Expansión magazine placed it ninth among 183 participants in its ranking of Mexico's most responsible companies, putting it in the top 10. In Peru, Aquafondo awarded Rotoplas the "Water-Responsible Company" distinction for a third consecutive year.
Investor call scheduled for October 22
Following the results' release after market close on October 21, Rotoplas scheduled an earnings call for Thursday, October 22, at 10:00 a.m. Mexico City time, or noon ET. Rojas Aboumrad and CFO Andrés Pliego Rivero were scheduled to present the results and answer investor questions. The company said a recording would be made available.
