Cemex Latin America cement shipments edge ahead, grows stronger downstream

Cemex Latin American Holdings' turnover for the first nine months of the year advanced by eight per cent to US$1287.8m, while the EBITDA increased by 16.2 per cent to US$474.4m. The increase at the trading level was a little less at 14.1 per cent to US$405.4m. After a net interest charge of US$86.8m, the pre-tax profit amounted to US$309.1m.

Net debt at the end of September stood at US$1345m, to give a gearing level of 94.7 per cent, with 88 per cent of the total gross debt being denominated in US dollars.

Cement shipments in the period increased by 1.9 per cent to 5.37Mt, of which domestic deliveries accounted for 90.2 per cent. Aggregates deliveries rose 5.2 per cent to 5.46Mt and the ready-mixed concrete volume was ahead by 5.8 per cent to 2.44Mm³.

In Colombia, turnover rose 9.3 per cent to US$734.7m and EBITDA advanced by 12.7 per cent to US$304.7m. Domestic grey cement deliveries were one per cent lower, though in the third quarter there was an eight per cent increase. The aggregates volume was five per cent ahead and ready-mixed concrete deliveries improved by nine per cent. Cement prices rose by six per cent in local currency and by two per cent in US dollars, while the average aggregates price eased by three per cent though the ready-mixed concrete price improved by four per cent. Housebuilding is an important driver of demand and commercial and industrial demand was helped by improved confidence.

Panamanian turnover improved by 7.4 per cent to US$237.74m and the EBITDA grew by 15.7 per cent to US$113.9m as the EBITDA margin rose from 44.3 per cent to 47.9 per cent. Cement shipments improved by four per cent, with prices being one per cent ahead. Aggregates deliveries rose by 13 per cent in the third and ended the period six per cent ahead, with prices improving by nine per cent. Ready-mixed concrete deliveries were off by one per cent, though staged a 19 per cent improvement in the third quarter and prices rose by 10 per cent in the year to date. Work on the widening of the Panama Canal and other infrastructure projects continue to boost demand and housebuilding is also going well.

The Costa Rican turnover advanced by 17.8 per cent t0 US$117.2m and the EBITDA rose by 28.4 per cent to US$51.9m. Cement shipments improved by four per cent, with prices ahead by 12 per cent in local currency and by 13 per cent in US$. In aggregates, volumes declined by three per cent and prices were down by four per cent. Ready-mixed concrete deliveries declined by eight per cent, but prices improved by 16 per cent, both in US dollars and in local currency. Hydro-electric plants and road-building were the main drivers of cement demand.

The remainder of the region saw turnover increase by 2.4 per cent to US$210.6m, with the EBITDA being 5.6 per cent higher at US$59.1m. Cement shipments were stable overall, with the dollar price improving by one per cent. Aggregates shipments jumped by 46 per cent and the average price improved by 17 per cent, while in ready-mixed concrete volumes improved by two per cent and prices by nine per cent in US dollar terms. Nicaragua and Guatemala performed well, with the main boost coming from infrastructure investments.

For the full year, Cemex Latin America is expecting cement volumes to increase by around three per cent, seven per cent in Costa Rica, three per cent in Panama and two per cent in Colombia. Aggregates and ready-mixed concrete volumes are both forecast to advance by around nineper cent, with the strongest growth coming from Colombia, which, interestingly has the weakest growth expectations in cement. Capital investment, which amounted to US$53m in the nine months, is expected to reach US$116m for the full year, of which US$60 should be strategic as opposed to maintenance.