GCC announces overall increase in sales for 1H19

Mexico's Grupo Cementos de Chihuahua (GCC) has announced a 1.3 per cent YoY increase in sales to US$403.9m for the first six months of 2019, against US$398.8m in the year-ago period. EBITDA declined five per cent to US$109.2m, while the EBITDA margin slipped 1.8 per cent to finish at 27 per cent.

The 2Q19 saw a 3.5 per cent YoY rise in sales to US$240.5m from US$232.3m. EBITDA advanced 2.2 per cent to US$70.9m in the same period. However, the company’s EBITDA margin contracted 0.4 per cent to 29.5 per cent.

In the USA the company’s sales decreased by 1.6 per cent YoY to US$278.8m in the 1H19, primarily due to a 12.4 per cent drop in ready-mix volumes and a 0.9 per cent fall in cement volumes.

"While GCC’s US operations continued to be adversely impacted during the second quarter by an above-average precipitation and below-average temperatures and construction labour shortages, the substantial backlog at our US operations underscores strong demand for our products. We’ve begun to reap the benefits early in the third quarter, as the US weather has finally cleared," said Enrique Escalante, CEO.

The company reported an 8.2 per cent rise in Mexican sales to US$125.1m for the January-June 2019 period. This has been attributed to a 5.5 per cent and 9.6 per cent increase in cement and ready-mix prices, respectively, as well as cement and ready-mix volumes rising 4.4 per cent and 3.4 per cent, respectively.

"We remain focussed on containing expenses ahead of strong anticipated demand in the second half in the US. And while we’re cautiously optimistic that our performance will strengthen in the coming semester, we have revised certain areas of our guidance based on our results thus far", said Mr Escalante.