Cemex said on Thursday it expects to report a nine per cent rise in operating cash flow in the third quarter of 2012, compared with the year-earlier period, although sales in dollar terms are expected to be down about two per cent. This is Cemex’s first results guidance in more than three years.
The Mexican cement major said that adjusted for currency swings, sales in the third quarter were probably up three per cent from a year earlier, and EBITDA was likely 13 per cent higher.
The results are expected to follow a similar trend as that observed during the first half of 2012, Cemex added.
Cemex said the preliminary earnings information was to be released to prospective buyers of private placement notes, and that its full earnings for the July-September quarter will be reported later this month.
Meanwhile, Cemex announced it has priced US$1.5bn of 10-year notes with which it will pay down existing debt and lower the interest on recently refinanced loans. The new senior secured notes due 2022 will pay annual interest of 9.375 per cent. The offering is expected to close on 12 October.
Cemex will use the money to make a US$1bn prepayment on debt that it recently refinanced, meeting a March 2013 prepayment milestone of US$1bn, and a US$500m amortisation payment due February 2014. The payments will lower the interest on debt under the recent agreement by a quarter of a percentage point.
The issuance gives highly leveraged Cemex even more room for manoeuvre in its efforts to lower debt and increase its financial flexibility after several years of debt problems that have required asset sales, layoffs and other cost-cutting and efficiency measures to pull through.
