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Cemex reports sales increase of 6%

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World Cement,

Cemex has announced its results for 1Q17, reporting that, on a like-to-like basis for the ongoing operations and adjusting for currency fluctuations, consolidated net sales increased by 6% to US$3.1 billion, versus 1Q16. Operating EBITDA on a like-to-like basis increased by 2% during the quarter to US$559 million, versus the same period in 2016.

  • The increase in quarterly consolidated net sales was due to higher prices of our products, in local currency terms, in most of our operations, as well as higher volumes in Mexico and our Europe and South, Central America and the Caribbean regions.
  • Operating earnings before other expenses, net, in the first quarter increased on a like-to-like basis by 3%, to US$351 million.
  • Controlling interest net income during the quarter improved to US$336 million, from an income of US$35 million in the same period last year.
  • Operating EBITDA on a like-to-like basis increased by 2% during the quarter and compared to the same period in 2016, to US$559 million. Operating EBITDA margin decreased by 0.5 percentage points on a year-over-year basis reaching 17.8%.
  • Free cash flow after maintenance capital expenditures for the quarter was negative US$153 million, compared with US$8 million in the same quarter of 2016.

Fernando A. Gonzalez, Chief Executive Officer, said: “We continued to see favourable results from our value-before-volume strategy during the quarter. Sequential and year-over-year pricing increased in the low- to mid-single digits for our three core products. This, together with favourable volume dynamics in Mexico and our Europe and South, Central America and Caribbean regions led to solid growth in consolidated sales and operating EBITDA, on a like-to-like basis. In addition, net income increased close to a tenfold during the quarter.

During the quarter, we reduced our total debt by US$470 million. This debt level is more than US$2.7 billion lower than that at the end of 2015, representing a reduction of close to 18%. We have about US$230 million of announced asset sales pending to close. This, plus free cash flow generation during the rest of the year should help us continue to de-lever, reach our debt reduction target for this year, and bring us closer to an investment-grade capital structure.”

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