Cemex LatAm sees sharp decline in Colombia

Cemex Latin American Holdings' first-half turnover declined by 4.4 per cent to US$642.8m, while  EBITDA fell by 25.8 per cent to US$167.7m as the company saw a sharp decline in the Colombian market.

At the trading level there was a 32.1 per cent reduction to US$123.1m. After a net interest charge 9.4 per cent higher at US$32.1m, the pretax profit emerged 50.1 per cent lower at US$82.8m. The net attributable profit dropped by 49.2 per cent to US$51.1m. Net debt at the end of June was 8.8 per cent lower than a year earlier at US$897m, giving a gearing level of 59.6 per cent compared with 67.3 per cent a year earlier.

Cement shipments in the period were 0.1 per cent higher at 3.78m, while aggregates deliveries declined by 3.8 per cent to 3.56Mt and the ready-mixed concrete volume was 5.4 per cent lower at 1.48Mm³.

The Colombian turnover declined by 14.3 per cent to US$290.5m and EBITDA emerged 47.9 per cent lower at US$60.3m. Domestic grey cement deliveries declined by around five per cent, while the aggregates volume fell by 17 per cent and ready-mixed concrete deliveries came down by 14 per cent. The average cement price declined by 20 per cent in local currency and by 17 per cent in US dollar terms. Construction activity was negatively affected by a difficult economic environment, adverse weather conditions and fewer working days as Easter fell in April this year.

In Panama turnover advanced by 8.8 per cent to US$141.2m, helped by a number of important projects and EBITDA eased by just 0.3 per cent to US$57.8m. Cement shipments recovered by nine per cent while the average cement price was little changed. Aggregates deliveries were 19 per cent higher, again with stable prices. Ready-mixed concrete deliveries were up by 23 per cent and prices were unchanged.

Costa Rican turnover was 6.2 per cent lower at US$76.6m and EBITDA declined by 22.2 per cent to US$27.06m. Cement shipments fell two per cent and the average price eased by four per cent in local currency and by eight per cent when measured in US dollar. In aggregates, volumes improved by 26 per cent, but local prices fell by 49 per cent and by 52 per cent in dollar terms. Ready-mixed concrete deliveries declined by seven per cent while in dollar terms prices were down by 17 per cent.

The remainder of the region saw turnover improve by 11.4 per cent to US$148.21m, but EBITDA only managed a 5.4 per cent increase to US$46.8m. Cement shipments improved by 12 per cent and the dollar price was unchanged. Aggregates shipments recovered strongly and were ahead by 87 per cent, though and the average price declined by 15 per cent in dollar terms, while ready-mixed concrete volumes rose by 30 per cent though prices were off by 11 per cent in US dollar terms. Cement volumes in Nicaragua were boosted by infrastructure investments, while in Guatemala industrial and commercial building activities powered demand for cement.

Outlook
For the full year, Cemex Latin America is expecting cement volumes to show a the strongest performance in Panama and the weakest in Colombia. Aggregates volumes are forecast to show overall volume growth of about two per cent, while ready-mixed concrete volumes should show a slight improvement. Maintenance expenditure is expected to amount to around US$51m in 2017, while some US$9m is forecast to be spent on strategic investments.