Weak cement shipments data in July and August, principally in the US, have caused analysts at Jefferies International to reduce its EBITDA estimates for 2010 and 2011.
It has reduced its EBITDA forecasts from US$2.573bn to US$2.382bn for 2010 and from US$2,720bn to US$2.644bn for 2011. The revised forecast is 10% below the company’s current guidance for 2010 (US$2.65bn) and 5% below Bloomberg’s estimate of consensus (US$2,516m). The latter has declined by US$50m during the last four weeks, and is still probably boosted by some estimates that still have to be updated, Jefferies said in a recent note.
When announcing its second-quarter results on 27 July, Cemex forecast that its US cement shipments would increase by around five per cent in 2010. After the one per cent decline in the first-half, this would have required almost a double-digit percentage increase in the second-half. Based on industry shipments data by state for July and August, Jefferies estimate that its shipments declined by around three per cent during these two months. It now expect Cemex’s 3Q EBITDA at group level to be around US$100m lower than last year at around US$705m. The revised full-year EBITDA estimate still requires a small increase in the fourth quarter.