BMV classifies Cemex as higher risk

BMV classifies Cemex as higher risk
Published: 08 October 2010

The low demand for cement in Mexico and the United States puts Cemex’s operation under pressure, and among all the possibilities of investment in cement companies in the Bolsa Mexicana de Valores (BMV), their actions are classified as "higher risk."


"We attach high risk rating for Cemex, due to its high financial leverage, the grim recent financial performance and uncertainty in the construction sector demand in several key international markets where the company operates," explains a report from Banamex circulated among investors last week.


In these times of low consumption of cement in the United States and Mexico, cement prices are the Achilles heel for the profitability of Cemex.

More so considering the debt payments the cement company has for the next 15 years.


And the main markets for the level of income do not respond to the cement company.

 
Thus, the "risks to the shares of Cemex include a weaker than anticipated construction activity in the US and Europe and demand for heavy construction materials, as well as risks of declines in the prices of their products due to weak demand, "explained the report by Dan McGoey.