The Cemex 2005 final numbers

The Cemex 2005 final numbers
Published: 30 January 2006

Cemex increased its 2005 turnover by 88.0 per cent to US$15,3201.0m and the EBITDA for the year rose by 40.1 per cent to US$3,557.1m.  The trading profit improved by 34.3 per cent to US$2,486.7m, which after a net interest charge 39.6 per cent higher at US$486.9m led to a running profit before tax of US$1,999.8m, an advance of 33.1 per cent.  Net debt at the end of the year stood 55.1 per cent higher at US$8,665m, which represents a gearing level of 83.7 per cent.  Cement deliveries in 2005 were 22.5 per cent higher at 80.57m tonnes but the initial consolidation of RMC Group for ten months is considerably more marked in the downstream volumes, with ready-mixed concrete deliveries up by 191.0 per cent to 69.52m m³ and aggregates shipments were 257.0 per cent higher at 160.07m tonnes. 
 
Mexican turnover rose by 8.8 per cent to US$3,176.3m but the EBITDA only advanced by 1.3 per cent to US$1,279.9m as cement prices fell by around 2 per cent in constant peso terms, though when measured in US dollars there was a 6 per cent increase.  Similar, though more pronounced, pricing trends were seen in ready-mixed concrete and in aggregates with average prices in constant pesos being off by some 3 per cent and 15 per cent respectively.  Cement deliveries were around 1 per cent higher, thanks to a 5 per cent rise in the final quarter, and the ready-mixed concrete volume rose by 15 per cent in the year, with good demand from public sector civil engineering and formal housebuilding more than offsetting weaker demand in the self-construct segment, that usually attracts higher margins.  A 6 per cent price increase, mainly for bagged cement, has bee announced in January 2006 for the Mexican market and under the new US-Mexican cement agreement, Cemex expects to export around 2m tonnes from Mexico to the United States this year. 
 
The United States contributed a 106.2 per cent increase in turnover to US$4,040.2m and the EBITDA advanced by 119.6 per cent to US$1,015.1m, helped by kind weather in December.  Average prices were well up across the board, with increases of 18 per cent in cement, 25 per cent in ready-mixed concrete and 21 per cent in aggregates.  In part, these increases reflected higher energy costs, but also a tight supply situation in many USA cement markets.  Actual cement deliveries were 6 per cent higher, but on an underlying basis, adjusting for the sale of two cement plants to Votorantim and the addition of the RMC works in California, the increase was more like 8 per cent.  Ready-mixed concrete shipments were 6 per cent higher on an underlying basis but the additional ten month contribution from the RMC operations led to a jump of 177 per cent.  For aggregates, the corresponding rates of increase were 12 per cent and 112 per cent. Cement price increases of around US$10 per short ton are being introduced between January and March 2006, depending on the area, with a further US$5 per short ton planned for July.
 
In South America, Central America and the Caribbean, turnover emerged 5.5 per cent higher at US$1,315.8, but the EBITDA declined by 23.2 per cent to US$381.7m.  Higher fuel costs and an 11 per cent drop in average cement prices across the area in dollar terms were behind the drop in margins though cement volumes rose by some 19 per cent, helped by a strong recovery in construction spending in Venezuela and a 33 per cent jump in group cement deliveries in Colombia.  In ready-mixed concrete, volumes rose by 31 per cent and prices by 4 per cent, with the corresponding numbers for aggregates were +22 per cent and +7 per cent. 
 
The European operations produced a turnover of US$5,686.2m last year compared with US$1,358.5m in the previous year, when Cemex was active only in Spain.  The European EBITDA emerged at US$937.3m.  Spain remains the largest single contributor, with an EBITDA 4.7 per cent higher at US$437.7m on a turnover 9.4 per cent ahead at US$1,486.2m. Average cement prices rose by some 6 per cent in Spain on volumes that were 4 per cent higher.  The RMC effect contributed to a 57 per cent jump in ready-mixed concrete deliveries, with the average price being around 5 per cent higher, while aggregates shipments were70 per cent ahead on average prices that advanced by 17 per cent.  Underlying cement deliveries in Great Britain declined by 2 per cent last year and by 4 per cent in the final quarter, while ready-mixed concrete volumes declined by 1 per cent over the year, but higher kiln fuel and electricity costs were recovered in higher prices.  In Germany, ready-mixed concrete deliveries fell by 12 per cent in a continued weak market and 14 per cent lower domestic cement deliveries were partially compensated for by a 26 per cent increase in export volumes. France presented a much better picture, with volumes ahead by 6 per cent in ready-mixed concrete and by 1 per cent in aggregates.  
 
In Africa and the Middle East, turnover jumped by 180.3 per cent to US$534.8m and the EBITDA improved by 70.2 per cent to US$148.3m.  Domestic cement deliveries in Egypt increased by 23 per cent, in line with the volume growth for the area, while cement prices were ahead by 21 per cent in us dollar terms.  The Asian turnover rose by 52.5 per cent to US$297.1m and the EBITDA advanced by 9.3 per cent to US$60.0m. Cement shipments rose by 2 per cent and dollar prices by 10 per cent.  Cement volumes declined in The Philippines, but increased in both Thailand and Bangladesh.