A mixed year for CEMEX in 2017
Published by Jonathan Rowland,
CEMEX made a net loss of US$105 million in the final quarter of 2017, compared to income of US$214 million in the same quarter of 2016. According to the company, the loss comes on the back of lower operating earnings, coupled with higher expenses and taxes.
Operating earnings fell 10% to US$410 million, despite an 8% increase in net sales to US$3.424 billion. Cement volumes were up 7% at 17.238 million t. Ready-mixed concrete and aggregates volumes also showed growth.
Sales were up in Mexico (6%), the US (4%), Europe (5%), and in Africa, Middle East and Asia (15%), although they were down 3% in South/Central America and the Caribbean.
Earnings however only increased in Mexico and Europe; in the US EBITDA was down 5%, in South/Central America and the Caribbean they were down 3%, and in Africa, Middle East and Asia earnings were down 31%.
Cost of sales also increased by 2.2 percentage points from 63.2% to 65.4%, driven mainly by higher energy costs. Distribution expenses were also higher over the quarter, while the company was also hit by other expenses of US$271 million, resulting from asset impairments, severance payments, and expenses related to an anti-trust fine in Colombia.
“We had important headwinds during the year,” said Fernando Gonzalez, CEO of CEMEX. “Underperformance in Colombia, Egypt, and the Philippines, as well as increased energy costs, mainly in Mexico.”
Despite the challenging fourth quarter, net income for the year hit a ten-year high of US$806 million, compared to US$750 million the year before.
Consolidated cement volumes for the year were 68.528 million t, steady with the previous year. Ready-mixed concrete and aggregates volumes were also steady. Net sales rose 2% to US$13.672 billion, although earnings were down 7% to US$2.572 billion. In the company’s two largest markets – the US and Mexico – EBITDA finished the year up on a like-for-like basis.
Read the article online at: https://www.worldcement.com/the-americas/12022018/a-mixed-year-for-cemex-in-2017/
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