Latin America, Central Europe and Asia lead the Cemex growth is the US profit drops

Latin America, Central Europe and Asia lead the Cemex growth is the US profit drops
Published: 25 April 2007

Cemex’ first quarter turnover rose by 9.5% to US$4,399.7m, helped by higher volumes in most markets, with the notable exception of the United States.  The EBITDA improved by 6.0% to US$867.6m but the trading profit slipped by 0.3% to US$557.9m.   The net interest charge fell by 30.7% to US$76.7m, which led to an 8.0% increase in the running profit before tax to US$481.2m.  The net debt declined by 39.6% to US$5,114m compared with the same time last year, giving a gearing level of 32.5%, but that is on Cemex’ definition that treats effective perpetual debt as equity.  First quarter cement shipments were 3.5% higher at 20.56m tonnes, while ready-mixed concrete deliveries were 0.2% lower at 16.84Mm³ reflecting the US volume drop.  Aggregates shipments, on the other hand, rose by 8.9% to 38.60Mt.  
 
Mexican turnover rose by 10.6% to US$900.8m while the EBITDA moved ahead more modestly by 4.0% to US$335.6m.  Domestic cement deliveries by rose around 6% while cement prices improved by about 1% in both constant pesos and US dollars.  Ready-mixed concrete deliveries advanced by some 12% and prices were, on average, around 3% higher, while aggregates shipments jumped by 91% and prices improved by 18%.  Housebuilding and infrastructure spending were the main drivers of increased demand.    
 
The abrupt ending last year of the prolonged housebuilding boom in led to a 19.6% drop in the United States turnover to US$834.8m and the EBITDA declined by 34.0% to US$178.7m. Cement deliveries fell by 18% though prices still improved by 7%. 
 
Overall European turnover rose by 21.6% to US$1,753.9m, reflecting not only higher prices, but also the weakness of the dollar, and the EBITDA was up by 28.1% to US$204.9m. In Spain, where turnover increased by 23.9% to US$509.9m, the EBITDA added 17.8% to US$153.2m.  Cement shipments in Spain increased by 2% and domestic prices rose by 10%.  In the downstream businesses, ready-mixed concrete deliveries were 1% ahead and prices rose by 10%, while in aggregates prices rose by 13% and volumes by 27%.  In Great Britain, domestic shipments of cementitious materials rose by 4% and average cement were some 5% higher, while consolidated ready-mixed concrete shipments declined by 4% while prices rose by a similar percentage.  British aggregates prices were 2% ahead on volumes that were off by 2%.

 The British profit contribution, however, declined by 30.4% to US$22.3m on a turnover 4.0% higher at US$470.7m.  In Germany, domestic cement deliveries rose by some 50% in a traditionally weak winter quarter, while prices improved by 3% in local currency.  In France, where Cemex does not produce cement, ready-mixed concrete deliveries rose by 6%, with prices up by 4%.  In French aggregates, both volumes and prices improved by around 6% across the product mix.  In the rest of Europe, cement shipments were helped by the weather and rose by 69%, while weighted average prices added 13%, while in ready-mixed concrete, volumes rose by 14% and prices by 10%.