GCC: profit down 41.8% in 1Q08

GCC: profit down 41.8% in 1Q08
Published: 25 April 2008

Mexican cement maker Grupo Cementos de Chihuahua (GCC) reported a 41.8% fall in profits to MXP167m  (US$15.9mn) in the first quarter of 2008, compared to MXP288m in the same period of 2007.

Although the company did not refer to the results directly in its quarterly report, the income statement shows a plunge in sales and operating income, as well as a 79% rise in financing costs.

GCC’s financing costs went up to 55mn pesos in the first quarter of this year, compared to MXP31m in the 2007 period, the company reported.

Meanwhile, revenues from sales in GCC’s Mexican, US and Bolivian operations also fell in the comparison period, decreasing 6% to MXP1.64bn  from MXP1.74bn.

The company attributes this trend to a lower gross margin and higher operating expenses.

At the same time, operating income declined 35.1% to MXP248m from MXP383m YoY.

This decrease was partially offset by a better pricing environment for the majority of the company’s products and favorable conditions in the Bolivian market.

Another factor to consider was the acquisition of concrete operations and cement distribution centers in the US during the first quarter of 2008 for US$116m.

Lastly, Ebitda fell 22.2% to MXP429m pesos from MXP552m in the comparison period, mainly due to lower sales in the quarter and an increase in costs and expenses.

GCC is one of Mexico’s biggest suppliers of cement, aggregates, concrete and construction-related services. It also has operations in the US and Bolivia.