Mexico’s Grupo Cementos de Chihuahua (GCC) consolidated results for the fourth quarter and full year ended December 31, 2005.
Net sales in the fourth quarter of 2005 increased 37.1% to a record $1,336.2m pesos. This reflected gains in each of the Company’s markets.
In the United States, net sales rose 24.1% as a result of the rise in average cement sales prices, combined with the 5.7% volume growth driven by strong continued demand in all construction sectors. Additionally, results in the period benefited from sales to third parties of coal from the Durango, Colorado mine.
In Mexico, the 15.7% increase was driven primarily by volume growth in cement and concrete, reflecting ongoing construction investment by state and municipal entities, as well as in the industrial, commercial and housing sectors. Excluding land sales in both quarters, which declined in the current period, sales growth in the fourth quarter would have been 46.1%.
As a result of the September 2005 acquisition of 47.02% of Sociedad Boliviana de Cemento, S.A. (SOBOCE), sales of SOBOCE were consolidated into GCC’s results on a proportional basis in the fourth quarter. Proportional net sales in the period totaled $171.1 million pesos, and represented 12.8% of GCC’s total net sales in the quarter. Excluding SOBOCE’s net sales, organic fourth quarter sales growth would have been 19.5%.
On a cumulative basis, GCC’s 2005 net sales rose 16.0% over the year ago period, including increases of 20.9% and 4.0% in United States and Mexico respectively. Excluding SOBOCE’s results in the fourth quarter, organic sales growth for the year would have been 11.8%.