GCC reports favourable performance in 4Q21 and 2021

GCC reported a 10.9 per cent YoY advance in consolidated net sales to US$257.9m in the fourth quarter of 2021. EBITDA remained stable at US$83.1m with an 31.5 per cent EBITDA margin.

Total cement volumes in the US grew by 5.1 per cent, but excluding oil well cement, they fell 5.5 per cent when compared with the 4Q20. Consolidated sales were further supported by a rise in US cement and ready-mix prices of 11.8 per cent and three per cent, respectively.

In Mexico cement and ready-mix volumes increased by 4.5 and 14.1 per cent YoY, respectively.

Full-year 2021
For the full year 2021, GCC posted a 10.8 per cent YoY hike in consolidated net sales to US$1038.8m. EBITDA improved by 9.6 per cent to US$337.9m with a 32.5 per cent margin.

The increase in sales came on the back of a 5.6 per cent YoY rise in total US cement volumes although when oil well cement was excluded there was only a 1.5 per cent uptick. Furthermore, US cement prices increase by 8.9 per cent YoY while concrete prices were 5.1 per cent higher when compared with 2020. Supported by increases in cement and concrete prices, US sales increased 8.3 per cent YoY to US$750.4m. However, not all was plain sailing in the US market as a challenging YoY comparison of windmill farm projects led to a 19.1 per cent drop in concrete projects.

Sales in Mexico expanded by 17.9 per cent to US$288.4m when compared with 2020 as cement volumes increased 6.9 per cent and concrete volumes were up 19.1 per cent. In addition, concrete prices saw a 6.2 per cent YoY increase. Domestic cement prices grew 4.2 per cent and were partially offset by the effect of the exchange rate on cement exports, resulting in a 2.2 per cent variation when compared with 2020. The appreciation of the Mexican peso against the US dollar increased sales by US$16.2m. For comparative purposes, Mexico sales, excluding the appreciation of the Mexican peso, would have increased by 11.3 per cent.

GCC also saw a drop in its net leverage (net debt/EBITDA) to -0.44x by 31 December 2021.

Outlook
The company expects to see low- to mid-single digit growth in its cement and concrete volumes in 2022, while in terms of US$ prices, it confidently forecasts mid-to high-single digit increases. It projects a total capital expenditure of US$260m, of which US$180m is allocated to growth, US$65 to maintenance and the balance is carried over from 2021.

Enrique Escalante, GCC’s CEO, said “GCC had another extraordinary year surpassing US$1bn in sales with record high EBITDA, despite the inflationary environment and supply chain challenges. We will capitalise on opportunities to further increase prices and offset incremental costs, and our plant expansion will ensure GCC is well positioned for the growth we anticipate from the Infrastructure Investment and Jobs Act.”