Cemex seen posting another 4Q loss

Cemex seen posting another 4Q loss
Published: 25 January 2010

Cemex probably recorded its second net loss in more than a decade during the fourth quarter of 2009, burdened by falling demand and an extraordinary charge linked to an asset sale.

A Reuters poll of seven analysts showed Cemex will report a loss of $519m for the October-to-December period last year.

The loss is likely to be less than in the fourth quarter of 2008, when Cemex reported a US$707m loss, the first in at least a decade.

 "Cemex’s fourth-quarter results are likely to disappoint," said Carlos Peyrelongue of Bank of America Merrill Lynch, who has an "underperform" rating on Cemex shares.

 Cemex, which is due to report on Tuesday after financial markets close, is struggling with slumping cement volumes in its key Mexican, U.S. and European markets as the global economic downturn cuts construction activity.

The sale of Cemex’s Australian assets last year for less than their book value will also drag on the company’s quarterly results, meaning a one-off US$446m loss.

 Some analysts had hoped to see the company touch bottom in the fourth quarter of 2009, but most agree it is still too early to predict a recovery this year.

 "Weak construction indicators during the quarter in Cemex’s core markets suggest no turnaround yet in construction activity in spite of consistent signs of improving macroeconomic performance," Credit Suisse said in a report.