Mexican cement producer Cemex is seen on track to return to profitability as soon as 2013, according to analysts quoted by Reuters.
The company recently refinanced US$6.7bn in debt, negotiating much-need room to push back looming payments for up to four years. Measures included a commitment to pay down US$1bn in March of next year, revised financial covenants and a debt swap, all of which have put relations with investors on a more comfortable footing.
In addition, Cemex floated its Cemex Latam Holdings business on the Colombian stock market, effectively raising around US$1.1bn and reducing its total debt of US$17.651bn (end-September) by about 6%.
"Cemex has taken the right steps to cut losses and we expect to see it generating positive flows in two to three quarters," said analyst Fernando Bolanos with Monex brokerage in Mexico City. Four out of six analysts consulted by Reuters see Cemex posting a net profit next year, with annual earnings seen ranging from US$28m to US$235m. The other two analysts expect the cement maker to turn profitable in 2014.
However, despite the improved results and a slow recovery of US cement sales, the biggest market for Cemex, analysts do not exclude further asset sales or debt refinancing. "We will still see (them exploring) alternatives to raise more cash," said Carlos Hermosillo, an analyst with Banorte brokerage. Furthermore, the fiscal cliff in the US and the country’s highway funding bill provide a mix of challenges and opportunities for the company.