Cemex Latin American Holdings burdened by weaker Colombian markets

Cemex Latin American Holdings burdened by weaker Colombian markets
Published: 23 October 2015


Cemex Latin American Holdings' turnover for the first nine months of the year declined by 16.8 per cent to US$1,102.1m and the EBITDA came down by 21.8 per cent to US$346.3m. The reduction at the trading level was 24.3 per cent to US$281.5m.

After a net interest charge that was 22.5 per cent lower at US$58.3m, the pre-tax profit emerged 35.5 per cent lower at US192.4m. A 15.5 per cent lower tax charge and lower minorities led to a 43.9 per cent reduction in the net attributable profit to US$117.1m.

Net debt at the end of September was 2.6 per cent lower that a year earlier at US$1060m, to give a gearing level of 79.2 per cent.

Performance by region
Cement shipments in the period declined by 8.2 per cent to 5.5Mt, with domestic deliveries being 5.5 per cent lower at 5.04Mt and representing 91.6 per cent of the total. Aggregates deliveries improved by 0.8 per cent to 6.55Mt while the ready-mixed concrete volume was 0.2 per cent ahead at 2.63Mm³.

In Colombia, turnover declined by 28.3 per cent to US$551.3m and the EBITDA fell by 32.8 per cent to US$188.5m. Domestic grey cement deliveries were down by nine per cent, with the reduction in the third quarter being six per cent. The aggregates volume eased by three per cent, while ready-mixed concrete deliveries were virtually stable. Cement prices improved by five per cent in local currency but fell by 24 per cent in US dollars, while the average aggregates price improved by three per cent and the ready-mixed concrete price improved by five per cent.

The Panamanian turnover eased by 7.2 per cent to US$223.9m but the EBITDA came off by 15.5 per cent to US$91.5m as the EBITDA margin declined from 44.9 per cent to 40.9 per cent. Cement shipments declined by some 5 per cent, but dropped by 23 per cent in the third quarter though prices moved ahead by 3 per cent. Aggregates deliveries were six per cent ahead in the nine months, but did decline one per cent in the third quarter, while the average price improved by three per cent over the nine months. Ready-mixed concrete deliveries declined by eight per cent while the average price achieved eased by 4 per cent. Cement deliveries to the widening of the Panama Canal consumed 84 per cent less cement in the third quarter as the project is now past its cemnt-itensive stage.

In Costa Rica, the turnover recovered and rose by 15.1 per cent to US$131m while the EBITDA was 5.8 per cent ahead at US$54.1m. Cement shipments were 12 per cent ahead over the nine months and rose by 14 per cent in the third quarter, while prices improved by two per cent in local currency and by four per cent in US$ terms. In aggregates, volumes were ahead by 20 per cent, while prices were down by two per cent. Ready-mixed concrete deliveries recovered by 14 per cent, but the average price declined by four per cent in local currency and by three per cent when measured in US dollars.

In the remainder of the region turnover eased by 0.8 per cent to US$208.5m, while the EBITDA came off by 4.6 per cent to US$57.2m. Cement shipments were off by four per cent, though there was a four per cent improvement in volumes in the third quarter. The average price in local currency improved by two per cent but the dollar price registered a four per cent reduction. Aggregates shipments rose by a further eight per cent over the period, and by 20 per cent in the third quarter, while the average price was up by 13 per cent, while in ready-mixed concrete volumes jumped 21 per cent while prices improved by two per cent in local currencies and were stable in US dollar terms. Nicaraguan infrastructure investment and housing improved both in the third quarter. Guatemala saw good levels of ndustrial and commercial activity.

Full-year guidance
For the full year, Cemex Latin America is expecting cement volumes do be modestly lower in Colombia and in Panama, but to increase by high single digits in Costa Rica. Aggregates and ready-mixed concrete volumes are forecast to advance in Panama and Costa Rica and to be flat to slightly negative in Colombia. Capital investment is expected to reach US$210m for the full year, of which most should be strategic and maintenance expenditure amounting to about US$52m.