Cemex SAB, the largest cement maker in the Americas, fell the most on Mexico’s benchmark stock index after reporting a third-quarter loss as construction stagnated in its domestic market.
“There was a fear after the Mexican election in June that some of the public sectors spending will fall off,” Adam Thalhimer, an analyst with BB&T Capital Markets, said in an interview. “This quarter is the evidence that it’s happening.”
Cemex’s sales declined 17 percent in Mexico, which accounts for about a fifth of the company’s revenue. Construction activity in the country contracted in August from a month earlier, crimping Cemex’s recovery from a recession that led the Monterrey-based company to the brink of default in 2009. The market had been the company’s second biggest after the U.S.
“There was a slowdown in investment” in government infrastructure projects in Mexico, Chief Executive Officer Fernando Gonzalez said on a conference call Thursday. Also, a “pickup in manufacturing activity has been slower than expected.”
The shares slumped 7.5 percent to 11.63 pesos at the close in Mexico City, with trading volume three times the daily average of the last three months. The decline was the
biggest drop of the 35 companies on the IPC index.
Operating earnings before interest, taxes, depreciation and amortization fell 10 percent to $677 million, Cemex said in a statement on Thursday. That missed the $757.5 million average of analysts’ dollar-based Ebitda estimates compiled by Bloomberg. The company reported a loss of $44 million on a 9 percent sales drop to $3.65 billion.