Cemex announced today that it expects EBITDA for the quarter ending March 31, 2007 to be about US$830m an increase of close to 2% versus the same period last year, while operating income is expected to be close to US$520m, 6% lower than the same period a year ago, due to higher depreciation and amortization charges during the quarter. For the first quarter, Cemex expects sales of close to US$4.2bn, an increase of close to 7% versus the same period a year ago.
Rodrigo Treviño, Cemex’ Chief Financial Officer, said: “During the quarter, most of our markets continue to show strong operating performance, mitigating the weak performance in the United States as a result of the ongoing correction in the residential sector. We continue with our cautious optimism for 2007 and expect to deliver EBITDA of about US$4.3bn in 2007. We expect our free cash flow after maintenance capital expenditures to remain stable versus last year and to continue exceeding 60% of our EBITDA in 2007. We plan to invest over US$1 billion during the year in EBITDA-growth opportunities in our existing markets. The recent placements of Cemex España’s notes and the perpetual notes at our sub-holding company in the Netherlands lengthen our debt maturity profile and strengthen our capital structure.”
During the first quarter, Cemex expects domestic cement and ready-mix sales volumes in Mexico to increase about 4% and 12%, respectively, versus the same period last year. Cement volumes continue to be driven by the infrastructure and a strong formal residential sector. The self-construction sector continues with a steady trend.
Cement and ready-mix volumes for Cemex’ operations in the United States are expected to decrease about 19% and 26%, respectively, during the first quarter versus the same quarter of last year. The main drivers of demand in the United States continue to be the industrial-and-commercial and public sectors, which are partially offsetting the deep correction in the residential sector, which continues to have relatively high inventory levels. Additionally, most regions in the country have experienced more normal seasonal weather this year compared to the unseasonably dry and warm weather in the first quarter of 2006.
Cement volumes for Cemex’ operations in Spain are expected to increase about 3% during the first quarter versus the comparable period of last year. Ready-mix volumes are expected to increase about 1% during the first quarter versus the comparable period of 2006. The main drivers of cement and ready-mix consumption continue to be a strong residential sector, as well as the infrastructure sector ahead of the upcoming local elections later this year.
In our United Kingdom operations, cement volumes for the first quarter are expected to increase about 4% versus the same quarter last year. Ready-mix volumes are expected to decrease about 3% during the first quarter versus the comparable period of 2006. Cement volumes continue to be driven by the industrial, commercial, and public housing sectors.