Cemex second quarter preview

Cemex second quarter preview
Published: 15 July 2009

Mexico’s Cemex is expected to report a sharp fall in net profit for the second quarter, as construction in its key US and European markets continues its long slump.

A Reuters poll of seven analysts showed Cemex may have earned US$164m between April and June of this year.

Cemex’s expected profit would be 63 per cent below the US$444m recorded for the same quarter of 2008.

"We see very weak results explained by the crisis across the world’s construction sectors, especially in Cemex’s main markets," said Francisco Chavez, an analyst at BBVA Bancomer in Mexico City.

 Analysts say Cemex’s sales volumes in the second quarter likely fell around 35 percent in the United States, where the company is the country’s top cement maker; 50 per cent in Spain; and 30 per cent in the United Kingdom.

In Mexico, Cemex’s second-largest market, the fall in cement volumes was likely around 5 percent, as an outbreak of H1N1 flu in the country shut down the economy in early May.

Cemex is expected to report a 30.6 percent decline in quarterly revenue to $4.4bn, while EBITDA) are seen down 38.3 percent to $846 million.

The company, which bought Australia’s Rinker in 2007 just as the U.S. housing crisis hit, is in urgent talks with its creditors to refinance US$14.5bn in bank debt due over the next three years.

Source: Reuters