Cemex improves net profit strongly

Cemex reported a strong improvement in net profit for the six months to the end of June 2017, but cement volumes eased over the period.

First-half turnover was down by 0.2 per cent to US$,703.9m, while EBITDA declined by 6.4 per cent to US$1248.1m.The trading profit, however, improved by 14.2 per cent to US$959.5m while net interest payments increased by three per cent to US$537.5m and the pretax profit improved by 29 per cent to US$451.6m. The net attributable profit rose from US$241.2m to US$626.2m.

Equity shareholders' funds improved by 13 per cent by the end of June to US$9309.6m and the net debt came down by 19.1 per cent to US$11,509m. The gearing level dropped from 176.9 per cent a year ago to 123.6 per cent. Of the debt, 75 per cent was denominated in US dollar, 21 per cent in euro, one per cent in Mexican peso and the remaining three per cent in other currencies. Total capital expenditure for the year is forecast by the company to amount to some US$730m, of which maintenance capital expenditure should account for around US$520m.

Group shipments
Group cement deliveries in the six months were 2.5 per cent lower at 33.85Mt, but aggregates shipments improved by 2.2 per cent to 72.76Mt and ready-mixed concrete deliveries advanced by 0.9 per cent to 25.44Mm³.

Mexico
The Mexican turnover improved by 7.2 per cent to US$1533.2m and EBITDA also improved by 7.2 per cent to US$567.5m. Domestic cement deliveries were one per cent lower in the period, and in the second quarter it showed a 10 per cent reduction. The average cement price improved by 20 per cent in local currency and by 12 per cent in dollar terms. Aggregates volumes declined by two per cent, but the average price was 15 per cent higher in local currency and by eight per cent in US$ terms. Ready-mixed concrete deliveries were stable over the full period but fell by six per cent in the second quarter, with prices up by nine per cent in local currency and by two per cent in US dollar terms. 

US
In the United States, turnover eased by 1.5 per cent to US$1731m but EBITDA improved by 13.5 per cent to US$287.9m, adjusting for recent disposals. Cement shipments were seven per cent lower in the period while the average price improved by three per cent. The aggregates tonnage declined by two per cent while the average price was four per cent ahead. In ready-mixed concrete, deliveries declined by four per cent while the average price edged ahead by one per cent. Housebuilding as well as industrial and commercial building showed some improvement, but infrastructure spending showed a modest reduction in the period.

South America, Central America & the Caribbean
Turnover in South America, Central America and the Caribbean showed an underlying 8.1 per cent improvement to US$958.3m, but EBITDA came off by 12.5 per cent to US$252.8m. The separately-quoted Cemex Latin American Holdings accounted for 67.1 per cent of turnover and 66.4 per cent of EBITDA and reported on same day as the parent.

Cement volumes were 13 per cent ahead, while the price in local currencies was four per cent lower over the six months. The aggregates volume recovered by two per cent, but the price was three per cent lower, and ready-mixed volumes declined by five per cent while prices edged ahead by one per cent. Colombia is the biggest contributor, accounting for 30.4 per cent of turnover and 23.7 per cent of EBITDA but is not expected to show any volume improvements this year.

Europe
European turnover registered a 1.7 per cent reduction to US$1665.6m and EBITDA fell by 23 per cent to US$139.3m. European cement deliveries improved by an average five per cent, but the average price was one per cent lower in local currency, while aggregates volumes improved by seven per cent, as did ready-mixed concrete volumes.

British cement shipments declined by nine per cent while prices improved by four per cent, while in aggregates the tonnage was two per cent lower, with prices marginally firmer on average. In ready-mixed concrete, deliveries and prices were little changed.

French volumes improved by 14 per cent in aggregates and by nine per cent in ready-mixed concrete, while prices were marginally lower in aggregates and marginally better in concrete. In Germany cement volumes rose by 15 per cent while prices were one per cent down. Volumes improved by six per cent in ready-mixed concrete but by just two per cent in aggregates.

Polish cement volumes eased by one per cent, but the price recovered by three per cent. Polish aggregates shipments jumped by 34 per cent and prices improved by six per cent. Ready-mixed concrete volumes rose by 16 per cent while prices were two per cent lower.

In Spain cement volumes showed a 17 per cent recovery though prices declined by three per cent. Volumes declined by two per cent in ready-mixed concrete, but prices improved by six per cent. In aggregates there was a 30 per cent increase in volumes and prices improved by eight per cent.

Asia and Africa
Cemex' Asian and African turnover declined by 18.7 per cent to US$652.9m, while EBITDA fell by 42.5 per cent to US$113m.

Cement deliveries declined by 11 per cent and the average price was off by one per cent in local currency terms and declined by 25 per cent in US dollar terms. Aggregates deliveries improved by seven per cent and the average selling price improved by four per cent in local currency, while ready-mixed concrete deliveries were and the average price were little changed.

Domestic deliveries of grey cement in the Philippines declined by six per cent and the average price came off by eight per cent in local currency and declined by 14 per cent in US dollars. Egyptian cement volumes dropped by 20 per cent while prices improved by 11 per cent in local currency but dropped by 47 per cent in US dollar terms, while aggregates volumes improved by three per cent and the average price improved by 24 per cent in local currency. Ready-mixed concrete volumes were 10 per cent lower while prices declined by four per cent.

Full-year guidance
For full the year, Cemex is forecasting both cement and ready-mixed concrete volumes to improve by between 1-3 per cent, while aggregates volumes are expected to improve by between 0- 3 per cent. The cost of energy, on a per tonne of cement produced basis, is forecast increase by around eight per cent.