Cemex releases Q2 results

Cemex has announced that consolidated net sales decreased 3% in the second quarter of 2010 to approximately US$3.8 billion versus the comparable period in 2009. Operating EBITDA decreased 13% in the second quarter of 2010 to US$664 million versus the same period of 2009. Consolidated cement sales volume increased 3% versus the same period in 2009, while ready-mix and aggregates sales volumes decreased 5% and 4%, respectively.

Cemex’s consolidated second quarter financial and operational highlights

• Lower sales in the quarter were primarily attributable to a lower contribution from US and European operations
• The infrastructure and residential sectors were the main drivers of demand in most markets.
• Operating income decreased 23% during the quarter compared with the same period last year, reaching US$295 million.
• Free cash flow, after maintenance capital expenditures, for the quarter was US$187 million, down 59% from US$456 million in the same quarter of 2009.

Fernando A. Gonzalez, Executive Vice President of Planning and Finance, said: "During this quarter we continued to make significant progress in our objective of reducing our debt. To this end, we paid close to US$650 million of our debt ahead of schedule. Also, despite the prevailing headwinds, we believe that economic conditions in most of our markets have stabilised or reached inflection points, as evidenced by positive cement sales volume performance in several of our markets. Our ongoing cost reduction and rightsizing efforts throughout our operations will allow us to take advantage of the economy as it recovers.”

Consolidated corporate results

Net income from continuing operations was a loss of US$301 million in the second quarter of 2010 versus income of US$173 million in the second quarter of 2009 due to lower operating income, higher financial expenses, a higher loss on financial instruments and a foreign exchange loss, which was partially mitigated by a gain in financial income.

Total debt plus perpetual notes decreased US$1581 million, reflecting prepayments under the Financing Agreement, a positive conversion effect during the quarter, as well as a reduction in debt resulting from the exchange of a substantial portion of our perpetual debentures for new senior secured notes.

Geographical markets second quarter highlights

Net sales in operations in Mexico increased 8% in the second quarter of 2010, to US$923 million, compared with US$853 million in the second quarter of 2009. Operating EBITDA decreased 2%, to US$321 million versus the same period of last year.

Cemex’s operations in the United States reported net sales of US$684 million in the second quarter of 2010, down 8% from the same period in 2009. Operating EBITDA decreased 76%, to US$17 million, from US$70 million in the second quarter of 2009.

In Europe, net sales for the quarter decreased 10%, to US$1.3 billion, compared with US$1.5 billion in the second quarter of 2009. Operating EBITDA decreased 22%, to US$158 million, from US$204 million in the second quarter of 2009.

Cemex’s operations in South/Central America and the Caribbean reported net sales of US$360 million during the second quarter of 2010, representing a decline of 4% over the same period of 2009. Operating EBITDA was flat at US$128 million versus the same period in 2009.

Second-quarter net sales in Africa and the Middle East were US$262 million, down 2% from the same quarter of 2009. Operating EBITDA decreased 2%, to US$88 million for the quarter versus the comparable period in 2009.

Operations in Asia reported a 17% increase in net sales, to US$142 million, versus the second quarter of 2009, and Operating EBITDA was US$40 million, up 21% from the same period in the previous year.

Read the article online at: https://www.worldcement.com/the-americas/27072010/cemex_releases_q2_results/