Cemex 2011 turnover improves but net loss increases

Cemex’ turnover improved by 7.6% in 2011 to US$15,139.2m, but the EBITDA was just 0.8% ahead at US$2331.9m. The trading profit, however, advanced by 12.2% to US$960.2m, compared with a 26.5% fall a year ago. The net interest charge, which had risen by 22.9% in 2010, increased by a further 11.8% to US$1399.7m, and the cost of ‘other’ expenses also rose on the back of higher losses on financial instruments and exchange rates. This resulted in a pre-tax loss that was 37% higher at US$1,238.61m, while the net attributable loss emerged 17.6% higher at US$1,532.6m.

Net debt, including perpetual notes, was reduced by 0.8% to US$16,912m as 29% of the perpetual notes were redeemed. Debt has also reduced by disposals, which raised US$225m. Some 98% of the debt is considered long-term and the gearing level works out at 121.3% compared with 118.5% a year earlier. Some 78% of the debt was denominated in US dollars, compared with 19% in euros and 3% in Mexican peso.  Capital expenditure in the year was reduced by 11.0% to US$4859m.

Group cement shipments were 1.8% higher at 66.81 Mt and aggregates deliveries improved by just under 1% to 159.99 Mt, but ready-mixed concrete deliveries did rather better, increasing by 7.7% to 54.94m m³.

The Mexican turnover was 1.1% higher at US$3,474.4m and the EBITDA improved by 3.5% to US$1,195.8m, with the Mexican EBITDA margins recovering somewhat from 33.6% to 34.4%. Mexico generated 51.3% of the group EBITDA, compared with 49.8% in the previous year. Domestic cement deliveries improved by 1% in the year on average and the price was 3% higher. Improved demand was seen in infrastructure and in commercial and industrial building. The informal residential segment is now beginning to show signs of improvement. Aggregates volumes declined by some 5%, but prices did improve by 12%. Ready-mixed concrete deliveries increased by 6% and prices, in local currency, were ahead by a similar percentage.

In the USA, turnover improved by 1.2% to US$2,520.7m, but on a like-for-like basis there was a 5% decline. The EBITDA, however, deteriorated further with the loss increasing from US$44.9m to US$100.3m, though the trading profit was virtually unchanged US$655.7m. The final quarter had the benefit of more favourable weather, which contained costs and helped pricing in cement and ready-mixed concrete. Cement deliveries were off by 2% over the period, though it improved by 5% in the final quarter, with prices being stable on average. Deliveries of aggregates were down by 9% but the average price did improve by 8%, while in ready-mixed concrete, the volume rose by 7% and prices were ahead by some 3%.

Northern Europe turnover advanced by 17.7% to US$4,728.8m and the EBITDA jumped by 53.7% to US$415.8m, helped by strong performances in Germany and in Poland in particular. Overall cement volumes rose by 13% and average prices were 1% higher. Aggregates volumes more than recovered the previous year’s setback with an 8% advance, with prices improving by 3%. In ready-mixed concrete, volumes advanced by 13% and prices were up by 2%. In Great Britain, cement deliveries were 6% higher and aggregates volumes advanced by 4% with ready-mixed concrete deliveries rising by 2%. Prices were up by 1% in cement, by 3% in aggregates and by 2% in ready-mixed concrete. German domestic cement deliveries were 14% higher, but in spite of this the average prices achieved were slightly lower. German aggregates volumes rose by 12% on marginally better prices while in ready-mixed concrete volumes rose by 13% at stable prices. In Poland, cement volumes rose by 19% and prices by 5%, with investments in the infrastructure being the main factor boosting demand. Polish aggregates volumes rose by 5% and prices by 21%, while in ready-mixed concrete volumes rose by 33% and prices by 18%.  In France, where Cemex does not sell cement, aggregates deliveries advanced by 11% and prices by 4% and ready-mixed concrete volumes advanced by 12%, but prices by just 1%.

In the Mediterranean region, the two biggest markets, Spain and Egypt, were in decline. As a result, area turnover declined by 5.3% to US$1,745.4m and the EBITDA dropped by 17.7% to US$438.7m. Construction activity in Spain deteriorated further, notably in Catalonia and in the Levante region. Spanish cement deliveries fell by 19%, though prices were maintained, aggregates volume dropped by 24% though prices were 3% higher and ready-mixed concrete deliveries also came off by 21% but prices eased by just 1%. In Egypt cement deliveries were 3% lower and prices fell by 7%, with downstream activities being hit rather harder: in aggregates volumes fell by 13% and prices by 23%, while in ready-mixed concrete the drops were 17% and 9% respectively. Other countries were less badly affected and the average volume reductions were –8% in cement, -9% in aggregates and –1% in ready-mixed concrete.

In South America, Central America and Caribbean, Cemex generated a turnover 20.9% ahead at US$1,745.3m, but the EBITDA was only up by a more modest 11.4% to US$512.8m. The region is the second largest profit earner for the group behind Mexico, but only fourth in terms of turnover. In cement, volumes rose by 5% and prices by 7%, while in aggregates the increases were 51% for volume and 3% on the price. In ready-mixed concrete volumes improved by 15% and prices by 7%. Colombia is the most important and here the cement volume rose by 5% and prices by 10%, while in aggregates prices declined by 7%, while additional capacity gave rise to a 89% jump in the output. The Colombian ready-mixed concrete activities improved volumes by 29% and prices by 6%.

Asian turnover declined by 2.0% to US$505.5m and the EBITDA fell by 34% to US$80.8m. Cement volumes declined by 2% last year while prices fell by 6%. In aggregates, volumes were off by 4% but prices improved by 6% and in ready-mixed concrete volumes declined by 8%, but a 7% average price increase was still achieved. The Philippines is the biggest market, but there are no downstream operations there. Cemex’ Philippine cement volumes declined by 5% last year and prices by 8%. Increased road expenditure began to have a positive effect late in the year and fourth quarter cement shipments showed a 16% increase.