Grupo Cimentos de Chihuahua (GCC) reported a 9% rise in cement sales volumes in 2014 and a 22% increase in concrete volumes. Total sales were up 19.1% y/y at MXN$10 009.7 million and operating income rose 87.4%. EBITDA increased by 39.7% y/y. In the fourth quarter, total sales grew 18%, operating income rose 73.3% and EBITDA rose 34.8%. The leverage ratio declined from 4.26 times in 2013 to 3.06 times at the close of 2014.
The group’s positive performance is attributed to increased sales in both Mexico and the US, driven in the latter by demand from the public utility infrastructure sector and highway and road construction, as well as in the commercial and industrial segments. In Mexico, the sales increase reflects increased activity in the commercial, industrial and residential sectors and major public infrastructure projects undertaken during the year. Prices were stable or positive in both markets.
Operating expenses increased in 2014, mainly due to higher wage and benefit expenses and the effect of the depreciation of the peso against the dollar on the operating expenses of the US division. Financial expenses decreased 30.6% y/y in 4Q14 due to lower outstanding debt and reduced interest rates. In the full year, financial costs increase 1.3% y/y caused by a 4.2% cumulative depreciation of the peso against the dollar, and the adjustment to the effective rate on interest-bearing liabilities, the financial cost of employee benefits and environmental remediation obligations, partially mitigated by an increase of 23.9% in financial income and a favourable exchange gain recorded in the year.
GCC expects a double-digit increase in consolidated sales in 2015, as well as a high single digit increase in cement volumes in the US and a single digit reduction in Mexico. A single digit increase in prices is expected in both countries as well as a double-digit increase in consolidated EBITDA. Capital expenditures for 2015 are US$90 million, which include a carryover of US$25 million from 2014.
Adapted from press release by Katherine Guenioui