Cemex 3Q turnover down 31%

Cemex 3Q turnover down 31%
Published: 28 October 2009

In the first nine months of the year, Cemex’ turnover fell by 31.1% to US$12,036m, which represented an underlying reduction of some 18% after adjusting for divestments, notably Venezuela and the Canary Islands, and exchange rate movements. The EBITDA declined by 35.6% to US$2,324.2m, representing an underlying reduction of about 22%. At the trading level, the profit reduction amounted to 47.3% to US$1,142.9m and while the net interest charge was 1.3% lower at US$664.8m.  Higher losses on financial instruments and other charges led to a 93.9% drop in the pre-tax profit to just US$76.2m.  A US$221.6m tax credit helped to reduce the reduction in the net attributable profit to 72.9% to US$301.5m.  The net debt, including minorities and perpetual debt, amounted to US$20,460m, giving a gearing level of 128.8% at the end of September. 

The Mexican share of the EBITDA increased further to account for 39.0% of the group total, compared with 28.7% two years ago and 32.2% last year.  The European EBITDA represented 20.7% of the group total and the United States for just 6.3% compared with 23.2% two years ago.  Cement shipments for the nine months declined by 19.4% to 49.64m tonnes, while aggregates deliveries fell by 22.0% to 145.81m tonnes and the ready-mixed concrete volume dropped by 24.5% to 45.00m m³.

Mexican turnover declined by 21.4% to US$2,287.7m, mainly reflecting a stronger dollar and on a like-for-like basis the turnover actually improved by some 3%.  The EBITDA fell by 22.2% to US$906.9m and the trading profit by 22.0% to US$803.6m.  Domestic cement deliveries were some 2% lower, while prices improved by 4% in local currency terms, in US dollars they fell by 21%.  Ready-mixed concrete shipments fell by 9%, though local prices were some 2% higher on average.  The aggregates volume, on the other hand, increased by 8% as Cemex increased its penetration from historically low levels and the local price improved by some 3%.   Housebuilding and non-residential building were in decline because of the economic conditions, though infrastructure spending remained good, but is now also showing signs of easing.  

The US turnover fell by 40.4% to US$2,223.6m as the recession continued and the EBITDA dropped by 74.3% to US$147.3m and a US$329.9m loss was incurred at the trading level, compared with a US$61.1m profit a year ago.  Cement deliveries fell by a further 34%, with aggregates shipments being down by 38% and ready-mixed concrete deliveries by 40%.  Average prices fell by around 6% in all three product categories.  The various stimulation programmes announced at both state and federal levels have, as yet, not led to any visible increase in demand in infrastructure spending in the geographical areas where Cemex is active.