Higher fuel and power costs affect Mexican cement producers

Higher fuel and power costs affect Mexican cement producers
22 November 2018

EBITDA margins of Cemex, Moctezuma, Cementos Chihuahua and Elementia have contracted by 0.5-2 percentage points in the 3Q18  as fuel and power costs in Mexico have risen.

"At least half of the increase in costs was due to increases in energy, both electricity and energy, whose prices are dollarised," said Carlos García, infrastructure analyst at Signum Research.

In the case of Cemex, the company’s overall EBITDA margin fell by 1.1 percentage points to 18.8 per cent while in Mexico, its operations saw the margin fall by two percentage points to 35.4 per cent.

Cementos Chihuahua saw its overall EBITDA rise by nine per cent, but in terms of its Mexican operations it slipped from 30.4 per cent to 30 per cent. However, costs pressures existed due to the company’s acquisitions in the USA, said the company in its quarterly report.

Moctezuma’s EBITDA margin contracted by one percentage point to 47.5 per cent. Its EBITDA decreased by four per cent due to a fall in sales and higher fuel, power and raw material costs.

Elementia’s Fortaleza subsidiary saw its EBITDA increase by three per cent but the EBITDA margin fell by two percentage points to 46 per cent. The company attributed the fall to “major pressures on energy costs, which were partly offset by leading edge technology and increased volumes.”

Published under Cement News