Cemex posted a 21 per cent fall in first-quarter profit when compared with the year ago period which included a large one-time gain. Net profit for Cemex was US$400m in the January-March period and in line with expectations.
That compared to US$505m a year ago when the company received a one-off windfall from an agreement with the United States over the cancellation of cement import tariffs. Cutting out the windfall from the results, Cemex’s first-quarter earnings rose 12 per cent due to strong sales in its home base Mexico, Spain, Latin America, Asia and Africa. That was despite a 20 per cent fall in net sales in the United States, the company’s traditional top market, where it has been affected by a slowdown in the residential housing market.
Mexico, which is enjoying a construction boom on the back of increased credit, generated US$901m sales for the company, making it the top performer in the quarter.
That was an 11 per cent jump compared to the same period a year ago and was followed by US$835m in sales in the United States and US$510m in Spain, where sales jumped 24 per cent in the quarter.
Overall revenue at Cemex rose nine per cent to US$4.3bn in the first quarter, compared to the same period a year ago.
“Cemex continues to increase sales, improve efficiency and pay down debt, even in the face of the slowdown in residential spending experienced in the United States,” said Hector Medina, Cemex’s planning and finance chief.
The United States is seeing a crisis in its subprime mortgage sector, which caters to borrowers with poor credit histories, which is bad news for a sector that is already suffering from an inventory build up and an increasing number of borrowers falling behind with their mortgage payments.