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Cemex makes significant progress towards investment grade

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World Cement,

Cemex, S.A.B. de C.V. has announced significant progress in its initiatives to bolster the company’s path to regain an investment-grade capital structure.

These initiatives include several transactions and efforts intended to strengthen Cemex’s EBITDA and cash flow generation as well as to reduce debt, which are expected to dampen the effects of continued market volatility. Cemex’s key financial and strategic milestones are the following:

  • Year to date, Cemex has announced divestments of close to US$2 billion; about half of which have been completed and the rest are expected to close by early next year. As such, CEMEX will be able to meet its US$1.5 to US$2 billion 2017 asset disposal target ahead of schedule.
  • With the proceeds from asset divestments, as well as free cash flow generation and cash on hand, Cemex has reduced total debt plus perpetual securities by more than US$2 billion year to date, in line with this year’s target. Taking into account this reduction in debt, as well as expected additional debt payments before year end, Cemex is on target to reach its leverage ratio target of about 4.25 times by the end of this year.
  • With the proceeds from pending asset divestments, as well as continued favourable free cash flow generation, Cemex is also well on track to reach its debt reduction target of US$3 to US$3.5 billion by the end of 2017.
  • Cemex is also currently on course to reach its initiatives to increase free-cash-flow by U.S.$670 million by the end of this year. In addition, the company expects to meet its cost-and-expense reduction target of U.S$150 million that has contributed to Cemex’s improvement in profitability during 2016.

Furthermore, Cemex has increased its flexibility to optimise its use of proceeds from asset sales and free cash flow by enlarging its revolving credit facility under its facilities agreement, and now has no significant maturities until March 2018.

“Despite challenging market conditions, working on the variables we can control has allowed us to be well on our way to significantly strengthen our capital structure, and we expect to continue to be able to do so in the near future,” said Fernando A. Gonzalez, CEO of Cemex.

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