Zambrano: exchange moves so far have favoured us

Zambrano: exchange moves so far have favoured us
Published: 25 February 2011

Lorenzo Zambrano, CEO of Cemex, said Thursday that foreign exchange market volatility has favored the company so far, particularly gains against the U.S. dollar by the euro and the Mexican peso.

At a press conference ahead of the company’s annual shareholder meeting, Zambrano said that past experience has shown the company it can’t predict exchange rates, even supported by analyst estimates.
Cemex cited uncertainty in some markets and exchange rate volatility when declining this year to estimate its earnings before interest taxes, depreciation and amortization, or EBITDA for 2011.

In 2010, Cemex reported Ebitda of $2.3 billion, after lowering its forecasts several times.

Zambrano acknowledged that the recovery in 2010 was slower than what the company had expected, but said that Cemex is poised as a more agile and efficient concern to benefit "disproportionately" from a pickup in construction in developed markets.

Zambrano considered that investors aren’t taking that into account when evaluating the value of the company’s shares. Financial markets aren’t rational, and less in case of Cemex, he said.

Shareholders approved the issuance of shares equivalent to 200 million American Depositary Shares, with the idea of raising capital to pay down debt.

Zambrano said he has a "strong preference" for the capital increase to be carried out via convertible debt.