Cemex Posts 16th Straight Loss as Mexico Construction Slumps
Cemex SAB (CEMEXCPO), the largest cement maker in the Americas, posted a net loss for the 16th straight quarter as a sales decline in Mexico blunted the company’s revived fortunes in the U.S.
The third-quarter loss narrowed to $155 million from $203 million a year earlier, the Monterrey, Mexico-based company said in a statement today. Operating earnings before interest, taxes, depreciation and amortization rose 1.6 percent to $747 million, trailing the $782.6 million average of eight analyst estimates compiled by Bloomberg.
Cemex’s losses have continued as a slowdown in the Mexican construction industry has presented a new challenge after the company emerged from a slump in the U.S. housing market. Third-quarter sales in Mexico fell 11 percent to $776 million, and operating Ebitda tumbled 21 percent to $248 million.
While rising competition, delays in government spending and bad weather in September hurt Cemex’s performance in Mexico, the company got a boost in U.S. and northern Europe, according to Carlos Hermosillo, an analyst at Grupo Financiero Banorte SAB.
“The consolidated results are in line with our estimates,” Hermosillo said in a telephone interview from Mexico City. “Mexico came in a little weaker than expected, and that might draw some attention. The positive part is that the Europe operations are better than what I was estimating.”
Cemex rose 1.2 percent to 13.88 pesos at 8:59 a.m. in Mexico City. The shares had gained 12 percent this year through yesterday, as the benchmark IPC index fell 7.2 percent.
Cemex’s Ebitda amounted to 18.6 percent of sales in the third quarter, compared with 18.8 percent a year earlier. The company reported free cash flow of $209 million, the first positive figure this year.
“Positive free cash flow was very good, as was keeping the consolidated Ebitda margin unchanged despite Mexico’s contraction,” Esteban Polidura, an analyst at Deutsche Bank AG in Mexico City, said in an e-mail response to questions.
Total cement sales volume was little changed at 17.1 million metric tons and ready-mix concrete volume advanced 1.1 percent to 14.7 million cubic meters. Aggregates such as sand, gravel and crushed stone were little changed in volume.
Cement volumes in Mexico dropped 13 percent in the third quarter, while cement prices fell 3 percent. Delays in public spending and losses at three publicly traded homebuilders have left the nation’s construction industry “depressed,” Corporativo GBM (GBMO) SAB, a broker, said in a report this month.
U.S. sales climbed 7.9 percent to $891 million, and Ebitda almost tripled to $78 million. Revenue in northern Europe advanced 5.8 percent to $1.17 billion, with a 14 percent gain in Ebitda to $162 million.
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