Cemex said Tuesday its net profit fell 27% in the second quarter to $444m, while higher sales and operating gains helped the company cut debt following athe Rinker acquisition.
Cemex said sales in the quarter rose 29% from the year-ago period to $6.3bn, boosted by the acquisition in July 2007 of Australian concern Rinker.
"Higher sales were mainly a result of the integration of Rinker as well as better supply-demand dynamics in most of our markets," Cemex said in a press release.
Second-quarter EBITDA rose 21% to $1.4bn, while operating profit rose 12% to $899m.
Sales were slightly below Cemex’s mid-quarter guidance of $6.4bn, while Ebitda was in line with the preliminary estimate.
The $15.3bn Rinker buyout increased Cemex’s debt load as well as its exposure to the slumping U.S. residential market.
Cemex said it generated $739m of free cash flow in the second quarter, and lowered its net debt by $1.2bn to $17.6bn.
Hector Medina, executive vice president of planning and finance, was quoted as saying Cemex "achieved significant increases in net sales while further reducing our debt level, even in the face of the continued downturn in the U.S. residential sector and the downturn in the Spanish economy."
Cemex said U.S. sales rose 38% to $1.3bn, and sales in Mexico, now Cemex’s second-biggest market, rose 12% to $1.1bn.
Sales in Spain fell 8%, but rose in the rest of Europe, South and Central America, Asia, Africa, the Middle East and Australia.
Dalmia Cement to invest US$1bn on fresh expansion
Dalmia Cement (Bharat) Ltd’s unit will invest up to $1 billion over the next three years to expand capacity to meet the infrastructure demand from a fast-growing economy, a senior company official said.
The firm’s wholly-owned subsidiary, Dalmia Cement Ventures Ltd, is aiming to create 10Mta of capacity across five plants in Rajasthan and Karnataka.
"Cement industry has linkage to gross domestic product growth. If GDP has to grow, infrastructure has to grow, cement has to grow," Somnath Patil, senior executive director-finance, told Reuters in an interview on Wednesday.