Cemex could have tripled its net profits in the third quarter of this year thanks to its acquisition of British firm RMC and gains from exchange rate fluctuations, according to Mexican newspaper La República. A survey of six sector analysts showed that their average forecast for Cemex’s net profits in July-September was US$634m, while the company actually made US$247m in the third quarter of 2004. In March this year Cemex finally wrapped up its acquisition of RMC for US$5.8bn, thus boosting its presence in Europe significantly and doubling sales in one fell swoop.
"Apart from the consolidation of RMC, the company is going to show a significant exchange rate profit," Vector Casa de Bolsa analyst Carlos Hermosillo was quoted as saying by the daily. The profit from exchange rate fluctuations will come about as a result of the 3.6 per cent appreciation of the peso against the US dollar in the third quarter.
"The strong exchange rate also helped operations in Mexico," said Anibal Habeica, analyst at brokerage Scotia Inverlat. Last month Cemex estimated that its sales in July-September had increased by 125 per cent to US$4.4bn after the integration of RMC. It also claimed that its EBITDA would be in excess of US$970m, with operating profits rising to US$730m.
Although Mexico is no longer Cemex’s main market, it still accounts for around a third of the firm’s EBITDA. The firm is expected to present its results for the quarter on Thursday, October 20.