Cemex expects best volume growth from USA

Cemex expects best volume growth from USA

Cemex reported a slight decline in turnover for the first half of 2013, with EBITDA also down marginally but the trading profit improved by double digits. While volumes were down in the first six months, the group sees full year sales edging ahead with the USA expected to show the best advance.

Cemex' first half turnover eased by 0.7 per cent to US$7322.1m and  EBITDA came off by 1.7 per cent to US$1251.2m, but the trading profit improved 13.8 per cent to US$690.2m.

Net interest payments were up by 5.3 per cent to US$731.3m and, with other charges, the pre-tax loss was 68.1 per cent higher at US$118.9m. The net attributable loss jumped by 96 per cent to US$432.7m. Equity shareholders' funds declined by 4.4 per cent by the end of June to US$10,761.6m and the net debt came down by 4.8 per cent to US$16,201m. The gearing level eased from 156.8 per cent a year ago to 150.5 per cent. Of the debt, 85 per cent is denominated in US dollar, 13 per cent in euro and two per cent in Mexican peso. Total capital expenditure for the year is forecast by the company to amount to some US$700m, of which maintenance capital expenditure should account for around US$510m.

Group cement deliveries in the six months were 3.8 per cent lower at 31.68Mt and ready-mixed concrete deliveries declined by 1.5 per cent to 26.28Mm3, but aggregates shipments recovered by 1.9 per cent to 76.2Mt. During the second quarter, the use of alternative fuels reached 28 per cent. 

Mexico

The Mexican turnover eased by 2.6 per cent to US$1626.7m as infrastructure spending remained weak and the EBITDA declined 14 per cent to US$513.8m.

Domestic cement deliveries were some eight per cent lower in the period, and the second quarter was only marginally less with a seven per cent decline. The average cement price eased by two per cent in local currency, but did improve by three per cent in dollar terms. Government spending on the infrastructure was low and less money was spent on social housing. Private housing activity was restrained by tight credit conditions.

Aggregates volumes improved by four per cent and the average price was stable in local currency. Ready-mixed concrete deliveries declined by six per cent but prices were stable in local currency and up by five per cent in dollar terms.

USA

In the United States, turnover advanced by a further 8.4 per cent to US$1,604.3m and the EBITDA climbed from US$2.6m to US$99.0m. Cement shipments increased by three per cent in the period and the average price was four per cent higher.

The aggregates tonnage rose by 12 per cent but the average price was just one per cent ahead. In ready-mixed concrete, deliveries increased by 11 per cent and the price improved by around six per cent. The higher volumes were achieved in spite of unfavourable climatic conditions and not only did the housing market improve but so did the industrial and commercial markets.

Cemex is forecasting its US cement volumes to increase by a mid- to high-single figure this year and that ready-mixed concrete volumes will somewhat grow faster than this.

Northern Europe

Northern European turnover declined by a further 8.7 per cent to US$1845.8m and the EBITDA fell by 48.9 per cent to US$91.9m. European cement deliveries were again affected by poor climatic conditions and volumes declined by an average eight per cent with prices being little changed overall.

British cement shipments improved by four per cent, but prices weakened by three per cent, while in aggregates the tonnage declined by three per cent with prices improving by one per cent. In ready-mixed concrete, deliveries improved by one per cent and prices improved by two per cent. French volumes were stable in aggregates but were down by 13 per cent in ready-mixed concrete, while prices were ahead by 2-3 per cent. In Germany, cement volumes declined three per cent and prices were a little weaker, while volumes eased by four per cent in aggregates and by eight per cent in ready-mixed concrete, while downstream prices in Germany moved in line with those in France.

Polish cement volumes, always sensitive to climatic conditions, fell by 28 per cent but the price only eased by three per cent. Polish aggregates shipments dropped by 29 per cent and prices came off by 15 per cent, while in ready-mixed concrete volumes retreated by 17 per cent while prices were five per cent lower.

Mediterranean

Turnover in the Mediterranean area eased by 1.8 per cent to US$747.4m and the EBITDA declined by 13.1 per cent to US$167.9m. Cement volumes declined by an average 4 per cent, while local currency prices averaged a six per cent improvement. In aggregates, volumes two per cent lower, but prices managed to improve by an average five per cent, while in ready-mixed concrete, volumes were ahead by five per cent and prices by two per cent.

In Spain, volumes continued to drop sharply, with reductions of 32 per cent in cement, by another 47 per cent in aggregates and by 34 per cent in ready-mixed concrete, with prices recovering by four per cent in cement, but declining by four per cent in aggregates and by nine per cent in ready-mixed concrete. Egyptian cement volumes improved by seven per cent and prices by 11 per cent, while aggregates deliveries fell by 13 per cent, prices improved by 16 per cent. Ready-mixed concrete volumes were off by seven per cent, but prices staged a 14 per cent recovery.

South America, Central America and the Caribbean

Turnover in South America, Central America and the Caribbean edged up by 0.5 per cent to US$1059.3m and the EBITDA increased by 8.7 per cent to US$398.9m. The separately quoted Cemex Latin American Holdings accounted for 76.8 per cent of both turnover and EBITDA and reported on the day before the parent. Cement volumes were one per cent down, though it had advanced by seven per cent during the second quarter, and the price in local currency improved by four per cent. 

The aggregates volume eased by one per cent, but, again, the price was four per cent higher, while ready-mixed concrete deliveries declined by 5 per cent but prices rose by eight per cent. Colombia is, by far, the biggest contributor, accounting for 42.2 per cent of turnover and 47.6 per cent of EBITDA.

Asia

Cemex' Asian turnover improved by 12.9 per cent to US$305m and the EBITDA jumped by 48.5 per cent to US$62.4m. Domestic cement deliveries increased by four per cent, while the average price rose by nine per cent in local currencies and by 12 per cent in US dollar terms.

Aggregates deliveries were one-third higher and the average selling price rose by 13 per cent, while ready-mixed concrete deliveries were one per cent down though the average price improved by three per cent. Domestic deliveries of grey cement in the Philippines increased by seven per cent and the average price rose by eight per cent in local currency, and by 11 per cent in US dollars. 

Outlook

For full the year, Cemex is forecasting cement volumes to improve by one per cent and for downstream volumes to be ahead by about two per cent. The cost of energy, on a per tonne of cement produced basis, is forecast to be relatively stable.