Analysis: two businesses, one currency, and where the loss actually comes from

The headline pairing of higher operating profit with a net loss is not a contradiction, and the report is specific about why. The loss of 201 million pesos comes from the integral cost of financing, which in Mexican reporting bundles interest, foreign exchange results and the monetary position result of a hyperinflationary subsidiary, plus a higher tax provision. Argentina is the source of the monetary position line, and its contribution to the operating business is now close to neutral: a 4 million peso EBITDA loss on 478 million pesos of sales. The operating drag from Argentina has largely gone; the accounting drag has not.

The more interesting split is products against services. Products grew sales 3.2% and EBITDA 22.4%, widening the margin by 280 basis points to 18.2%. Services grew sales faster, at 4.7%, and lost 92 million pesos at the EBITDA line against a 41 million peso loss a year earlier, a deterioration of the same order as the improvement in Argentina. Rotoplas attributes part of that to a resolved Brazilian litigation charge but does not quantify it, so a reader cannot separate the one off from the cost of scaling bebbia to more than 193,000 subscribers. That number is the single figure most worth tracking, because the services business is where the capital expenditure is going and it is the only segment moving away from breakeven rather than towards it.

The refinancing is the most easily checked change in the quarter. Prepaying the bond and taking a seven year Bancomext loan at TIIE plus 195 basis points converts a fixed maturity into a floating rate amortising one, and the four year swap on half the notional caps how much of that floats. Leverage at 2.3 times against 3.2 times reflects all three of cash, debt and EBITDA moving the right way, so it is not purely a denominator effect.

What the disclosure does not settle is pricing. Rotoplas repeatedly cites resin cost volatility and describes its response as pricing agility, but it publishes neither volumes nor average prices, so the 4.4% Mexican sales increase cannot be decomposed. Nor does the report quantify the Brazilian litigation charge or the composition of the sharp EBITDA fall in the other countries group, where margin dropped from 15.8% to 2.1% on rising sales.

The Mexican demand backdrop was supportive. The national statistics agency reported that the value of construction company output rose 7.5% year on year in real terms in May 2026, and 2.7% against April. Water storage, piping and treatment products sell into that activity, which makes the 4.4% Mexican sales increase a modest share of a growing market rather than a share gain, and puts the weight of the quarter on cost control rather than on volume.

What the documents say

Grupo Rotoplas S.A.B. de C.V. (BMV: AGUA) reported second quarter net sales of 3,044 million pesos on July 22, 2026, up 3.4% from 2,945 million pesos, with adjusted EBITDA of 409 million pesos, up 11.0%, and a net loss of 201 million pesos against a profit of 42 million pesos a year earlier. The loss sits entirely below the operating line, in financing costs tied to the company’s monetary position in Argentina.

Operating results improved across every line above interest

Gross profit was 1,277 million pesos, a margin of 42.0% and an expansion of 70 basis points, which the water solutions group attributed to price management against volatile resin costs and to production efficiencies that held cost of sales growth below sales growth. Operating profit rose 4.8% to 217 million pesos, with operating expenses kept below 35% of sales. The EBITDA margin reached 13.4% against 12.5%, a gain of 90 basis points.

For the first six months, net sales were 5,705 million pesos against 5,580 million pesos, gross profit was 2,415 million pesos at a margin of 42.3%, operating profit was 377 million pesos, up 9.1%, and EBITDA was 741 million pesos at a margin of 13.0%, 100 basis points above the prior year. The half year net result was a loss of 89 million pesos against a profit of 65 million pesos. Capital expenditure for the six months was 194 million pesos, 8.2% lower than a year earlier, directed mainly at the services business in Mexico.

One caveat belongs with the EBITDA figure. Rotoplas states that adjusted EBITDA for the quarter includes 18 million pesos of donations, and 20 million pesos for the half, against 1 million pesos and 2 million pesos in the equivalent 2025 periods.

Mexico and the smaller markets carried the growth

Mexican sales rose 4.4% to 1,787 million pesos from 1,711 million pesos, and Mexican EBITDA rose 15.1% to 377 million pesos, lifting the regional margin 200 basis points to 21.1%. The category the company groups as other countries grew fastest, with sales up 23.9% to 457 million pesos, though its EBITDA fell to 9 million pesos from 58 million pesos, cutting that margin to 2.1% from 15.8%.

United States sales rose 2.4% to 322 million pesos and EBITDA was 27 million pesos against 26 million pesos, at a margin of 8.5%. Management described it as the fifth consecutive quarter of positive EBITDA there.

Argentina was the exception on sales and the improvement on profit. Revenue fell 13.1% to 478 million pesos from 550 million pesos, while the EBITDA loss narrowed to 4 million pesos from 43 million pesos, taking the margin from negative 7.8% to negative 0.9%.

Split by type of business rather than geography, products generated 2,747 million pesos of sales, up 3.2%, and 501 million pesos of EBITDA, up 22.4%, a margin of 18.2% against 15.4%. Services generated 297 million pesos of sales, up 4.7%, and an EBITDA loss of 92 million pesos against a loss of 41 million pesos. The company said the services margin carried a non recurring charge from litigation in Brazil that has been resolved. Its bebbia water subscription business passed 193,000 active subscribers at the end of the quarter.

A refinancing that reset the debt profile

During the quarter Rotoplas fully prepaid its AGUA 17-2X sustainable bond and replaced it with a seven year loan from Bancomext priced at the 28 day TIIE rate plus 195 basis points. On the earnings call the company described its resulting structure as the new 4 billion peso Bancomext facility plus 431 million pesos of short term working capital lines in Mexico, and said it had hedged 50% of the notional through a four year interest rate swap.

Net financial debt, excluding leases, closed at 3,153 million pesos against 3,753 million pesos, a fall of 16.0%. Net debt to EBITDA improved to 2.3 times from 3.2 times a year earlier, which the company attributed to higher cash, lower debt and higher EBITDA together. Return on invested capital was 5.3% against 5.2%.