Grupo Cementos de Chihuahua (GCC), announced consolidated results for the quarter ended June 30, 2007.
Solid growth in GCC’s cement and concrete markets and the integration of concrete operations in the U.S. contributed to the double-digit increase in the Company’s revenues. In addition, lower cost of sales and SG&A on a percentage basis generated higher margins at the operating and EBITDA levels.
Net Sales increased 14.2% in the second quarter of 2007 and totaled $2,189.5 million pesos. This included a 15.5% increase in international sales and 11.9% domestically.
The double-digit rise in sales was the result of solid volume growth in cement and concrete operations in both the United States and Mexico, and higher average prices in both markets. Furthermore, there was one additional month of concrete operations in the second quarter of 2007, due to the acquisition of Mid-Continent Concrete Company (MidCo), which was finalized in May of 2006.
In the United States, sales grew 18.0% in the quarter as a result of higher sales volumes and a better pricing environment for cement and concrete. This reflects ongoing construction investment in the markets where GCC operates, despite a less dynamic housing sector. Sales also benefited from the integration of MidCo.
In Mexico, the 11.9% growth in net sales was the result of higher volume in all of GCC’s product lines, reflecting continued strong demand in housing and public works.
In the second quarter of 2007, GCC’s proportional share of sales in Bolivia represented 7.2% of total sales. A better pricing environment was not able to offset the decrease in volumes caused by weather-related delays for several paving projects. This led to a 0.6% decline in sales with respect to the year ago period.
On a cumulative basis, GCC’s net sales in the first half of 2007 rose 22.6% over the same period of last year based on increases of 32.4% and 16.5% in United States and Mexico, respectively, reflecting the successful integration of recently acquired concrete companies, as well as solid organic growth.