Cemex expects EBITDA for the quarter ending December 31, 2007 to be close to US$1,100 million, an increase of about 18% versus the same period last year, while operating income is expected to be close to US$650 million, 6% higher than the same period a year ago. Guidance for operating income excludes potential adjustments due to the revaluation of Rinker’s assets. Cemex expects sales of about US$5.8 billion, an increase of around 30% versus the same period a year ago. For the full year 2007, Cemex expects EBITDA of about US$4.6 billion, an increase of approximately 11% over last year. Revenue is expected to be in excess of US$21.6 billion, while operating income is expected to be close to US$3.1 billion, a growth of approximately 18% and 5% respectively. These results include the effect of consolidating the Rinker group starting July 1, 2007.
Rodrigo Treviño, Cemex Chief Financial Officer, said: “Our EBITDA guidance for 2007 reflects the continued weakness in the US residential sector and the upfront costs associated with the post-merger-integration process and our global expense-reduction initiatives. These initiatives will be important contributors to EBITDA growth in 2008 and beyond.”
“The strong operating performance and favorable supply-demand dynamics in most of our markets will more than offset the effects from the ongoing correction in the residential sector in the United States.”
“For 2008, we expect revenues of about US$24.5 billion and EBITDA of about US$5.6 billion, which represents a 13% growth rate over proforma 2007 excluding inflationary-accounting and exchange-rate-conversion effects. Close to half of the expected EBITDA growth for 2008 is expected to come from the contribution from synergies achieved in relation to the Rinker acquisition as well as our expense-reduction initiatives. The remainder will be organic growth, which we expect to be achieved in spite of zero growth in the United States and Spain.”
“We will continue to apply most of our free cash flow to reduce debt and remain committed to our deleveraging commitments”.
For the fourth quarter, Cemex’ domestic cement and ready-mix sales volumes in Mexico are expected to increase by about 2% and 7%, respectively, versus the same quarter a year ago. For the full year, cement and ready-mix volumes are expected to increase by about 4% and 9%, respectively, versus the same period of last year. The formal residential and infrastructure sectors continue to be the main drivers of demand in Mexico.